ADAPT. TRANSFORM. GROW

A D A P T . T R A N S F O R M . G R O W .

A N N U A L R E P O R T & A C C O U N T S 2 0 1 9A N N U A L R E P O R T & A C C O U N T S 2 0 1 9A N N U A L R E P O R T & A C C O U N T S 2 0 1 9

Adapt. Transform. Grow.Today’s technologies demand constant adaptations…transforming and growing businessesSelf-inflating tyres expand driving options…suiting all road-types, weather and blowouts

We operate ahead of emerging client-conditions Consistent with updated strategies and processesWe adapt, transform and grow

ANNUAL REPORT& ACCOUNTS 2019 01

ANNUAL REPORT& ACCOUNTS 201902

Our vision, Know Us in "This is Leadway" and a key notification in this section.

05Overview

THE FULL CONTENTS

Our year-on-year achievements brought to the fore under this section.

Business insight16

OVERVIEW

06 | Vision, Mission07 | Know Us in “This is Leadway”13 | Core Values15 | Notice of Annual General Meeting

BUSINESS INSIGHT

19 |Corporate Information

GOVERNANCE

22 | Board of Directors26 | Corporate Governance

Report38| Complaint and Feedback

Statement40 | Independent Auditor's

Report44 | Company Information and

Summary of Significant Accounting Policies

Quick rundown

Our Financial Statements, presented in numbers, quantities and estimates in this section.

21Get to know our Directors, Management and control mechanisms in this section.

66Governance

M o r e a b o u t o u r c o m p o s i t e company in this section.

156Appendices (Other National Disclosures)

CONTENTS

FinancialStatements

FINANCIAL STATEMENTS

67 | Company Statement of Financial Position

68 | Company Statement of Comprehensive Income

69 | Company Statement of Changes in Equity

71 | Company Statement of Cash Flows

72 | Notes to the Financial Statements


APPENDICES (OTHER NATIONAL DISCLOSURES)

157 |Value Added Statement158 | Five Year Financial Summary 160 | General Insurance Business

Statement of Financial Position

161 | General Insurance Business Income Statement

162 | General Insurance Business Revenue Account

163 | Financial Performance164 | Life Business Statement of

Financial Position165 | Life Business Income

Statement166 | Life Business Revenue

Accounts167 | Revenue Account on Deposit

Administration168 | Financial Performance169 | Life Business Annuity

Statement170 | Leadway at a Glance171 | Branch Network172 | Subsidiary

Insurers must embrace technology to rapidly d e e p e n i n s u r a n c e penetration.

Mr. Oye Hassan-Odukale, mfr.MD/CEO Retired


-CIIN Journal July, 2018

Overview06 | Vision, Mission07 | Know Us in “This is Leadway”13 | Core Values15 | Notice of Annual General Meeting


To be a service provider of choice, bringing insurance as a risk management tool to the consciousness of all; adding value to our clients and other stakeholders in an efficient and reliable manner.

MISSI N

VISIONTo be a leading insurance company and non banking financial solutions provider in Nigeria, leveraging on our strategic capabilities in other selected markets.



Retail Insuranceproducts that addvalue to you.

Paid in claims in2019.

20+N

CLAIMS

Insuring your happiness,no matter what happensin your business and life.

LEADWAYGUARANTEE

This is LEADWAY

N 38.5 billion

Leadway Employeeson hand to serve you.

Branches spreadacross the country tomeet your insuranceneeds.

313 24


Know Us

Established since 1970, LEADWAY is one of Nigeria’s foremost insurance companies with the reputation for efficient service delivery. For nearly 5-decades we stayed honorable to our Life and General Insurance underwriting commitments and have earned the reputation for excellence in claims-handling.

Our steady growth in premium income and combined assets currently stands at over N90b and N396b, respectively.

Our investment portfolio is one of the largest in the Nigerian Insurance Industry, with a total investment portfolio valued at over N328b. In the past year, we maintained Claims expense of N38.5b. We are money-market active, with over N21.5b deposited in A+ rated banks and other financial institutions. Our fixed income instrument stands at over N277b, consisting mainly of Federal and State Government Bonds.

Our Board of Directors consists of eminent Nigerians and seasoned business persons of proven personal integrity.

We are also firmly grounded by the foundation of integrity laid and instilled by our founder, of blessed memory, Sir (Dr.) Hassan O. Odukale (kjw, FCII).

This is LEADWAY


We honor the pledge to always meet our financial obligations to all customers through rain or shine.

Our Commitments

We offer fully integrated services covering the full spectrum of insurance products and allied financial services, some of which include Fire & Allied perils, Property/ All Risk, Personal Accident, Contingent Employee/ Liability, Householder's Comprehensive, General Liability, Marine Cargo & Hull, Engineering, Electronic Equipment, Goods in Transit, Motor, Aviation, Oil & Gas Power, Lifestyle + SME, Agriculture Insurance. Others are Life & Annuity Contracts, Individual Deposit Administration, Personal Savings Plan, Personal Annuity Plan, Mortgage Protection, Life Annuity Contracts, Bonds, Secured Credit, Miscellaneous Financial Loss, Managed Funds and Trusteeship.


Our Commitments Continued


N91bPremium Income

N54bShareholders’ Funds

N396bTotal Asset base

Keynotes

We maintain:

Ÿ Allied Financial Services like bonds, secured credit, miscellaneous financial losses and funds portfolio management

Ÿ Re insurance back up from Swiss Re, Africa Re, General Insurance of India, AIG of Europe, CHUBB, Ace Global, WAICA, Continental Re and various syndicates at Lloyds

Ÿ Highly computerized operations that enhance efficiency

Ÿ Clientele of government establishments, Ministries and Parastatals

Ÿ International non-affiliate network arrangement with key insurers across the globe – CHUBB, QBE, Swiss Re, Alianz, XL, HDI

Ÿ Data and analytics, our Management makes data-led decisions for the benefit of customers

Ÿ No loan stock and internally generate funds for capital projects backed by a carefully planned investment portfolio


Keynotes Continued


Our core values impact who we are, what we do and how we operate. M o s t i m p o r t a n t l y h o w eve r, i t i m p a c t s h o w w e s u p p o r t o u r customers. Nothing counts more in our thoughts than our customers. That’s why our core values are the foundation on which everything we do is built.

iSCOREI: IntegrityS: ServiceC: Customer FocusO: OpennessR: Respect for the IndividualE: Excellence

Core Values

Acting with honesty and honor towards all our stakeholders without compromising the truth.

Sharing information with ourcustomers, listening to them,receiving constructive feedbackand confronting ethical problemsimmediately.

Serving our customers in timely,responsive, pro-active mannerand meeting their needs andaiming to delight.

Treating every customer withutmost dignity and accordingthem all the attention and caredue to them.

Seeking to determine the needsof our customers and takingaction to satisfy them.

Confidently pursuing highestservice quality and giving thebest to our customers thatwarrants our persistentcommitment.


Notice of the 48th Annual General Meeting

Notice is hereby given that the 48th Annual General Meeting of LEADWAY ASSURANCE COMPANY LIMITED will convene virtually at the First Floor Meeting Room, Leadway House, 121/123, Funsho Williams Avenue, Iponri, Surulere, Lagos on Friday 29th May, 2020 at 11am to transact the following businesses:

Special Business1. “That in accordance with Section 217(2) of the Companies and Allied Matters Act 1990, shareholders

agree to hold the Annual General Meeting called notwithstanding that less than 21 days’ notice of meeting has been given.”

Ordinary Business2. To adopt the reports of the Directors and Auditors, including the statement of accounts for the year

ended 31st December 2019.3. To declare a dividend.4. To elect/re-elect Directors.5. To authorize the Directors to fix the Auditor’s remuneration.

BY ORDER OF THE BOARD

Olumide HansonCOMPANY SECRETARYFRC/2019/NBA/00000019064 121/123, Funso Williams Avenue, Iponri, Surulere,Lagos.

NOTES:

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of him/her. In view of the Covid-19 pandemic, attendance shall be virtual and also by proxy. Designated proxies listed in the proxy form attached to the Annual Report are Mr. Tunde Hassan-Odukale (Managing Director/Chief Executive Officer) and Mr. Olumide Hanson (Company Secretary). To be valid, executed forms of proxy should be deposited at the Office of the Company Secretary, Leadway Assurance Company Limited, 121/123 Funsho Williams Avenue, Surulere, Lagos, not later than 48 hours before the time of holding the meeting or sent via email to [email protected]

2. The Register of Members and their shareholding is available for inspection, at the office of the Company Secretary during normal business hours, from the date of this notice until the close of business on Tuesday May 26, 2020.

Mr. Olumide HansonCOMPANY SECRETARY


Business Insight


19 | Corporate Information

CHAIRMANGen. (rtd) Martin Luther Agwai, cfr


Y o u r c o m p a n y l e a p e d f o r w a r d t o p r e s e r v e i t s leadership position in the insurance industry in the year 2019, despite the negative macro-economic condition in Nigeria...


DIRECTORS

Gen. (rtd) Martin Luther Agwai, cfrMr. Oye Hassan-Odukale, mfr

Mr. Tunde Hassan-Odukale

Ms. Adetola AdegbayiMr. Jeremy Rowse

Mrs. Mowunmi Sotubo

Mr. Eugene Curley

Mr. Seyi BickerstethMr. Odein Ajumogobia

Mr. Martyn Parker

Chairman Managing Director (Retired wef 31st December, 2019)Managing Director (Appointed wef 1st January, 2020)Executive DirectorNon-Executive DirectorNon-Executive Director (Resigned wef 1st April, 2019)Non-Executive Director(Resigned wef 8th August, 2019)Non-Executive Director, Independent Non-Executive Director, IndependentNon-Executive Director (Appointed wef 3rd February, 2020)

Certificate of Incorporation Number

RC 7588

Date of Incorporation

22 September, 1970

NAICOM License Number

RIC-025

Registered OfficeNN 28/29 Constitution road,

Kaduna State NigeriaEmail:

[email protected]

Corporate Head Office121/123 Funso Williams Avenue,

Iponri Surulere, LagosTel: 01-2700700

Website:www.leadway.com

Corporate Information


Mr. Oye Hassan-Odukale, mfrMr. Tunde Hassan-Odukale

Ms. Adetola AdegbayiMr. Tinashe Muyambo

Mr. Gboyega LesiMr. Allan Olufade Suradj

Mrs. Kunbi AdeotiMr. Odalo Aimufia

Mr. Ernest AziagbaMr. Tunde Alao-Olaifa

Mr. Oluwafemi AdebayoMr. Bamidele Lawal

Mrs. Kikelomo FischerMr. Olumide Hanson

Managing Director/CEO - Retired 31 December, 2019Managing Director/CEO - Appointed 1 January, 2020Executive Director, General InsuranceHead, Life BusinessCommercial DirectorRegional DirectorHuman Resources DirectorChief Information OfficerGeneral Insurance ActuaryStrategy & Special Projects DirectorLife Sales DirectorChief Technical OfficerEnterprise Risk Management DirectorCompany Secretary

MANAGEMENT STAFF

Company SecretaryOlumide Hanson

FRC/2019/NBA/00000019064

Bankers and other Professional Advisors

AuditorsKPMG Professional Services

KPMG TowersBishop Aboyade Cole Street

Victoria Island, LagosTel: (01) 2718955

ActuariesErnst & Young NigeriaFRC/2012/NAS/00000000738

Access Bank PlcCitibank Nigeria Limited

FBN Bank (UK) LimitedFidelity Bank Plc

First Bank of Nigeria LimitedFirst City Monument Bank Limited

FSDH Merchant Bank Nigeria LimitedGuaranty Trust Bank Plc

Keystone Bank Nigeria LimitedPolaris Bank Plc

Stanbic IBTC Bank PlcStandard Chartered Bank Nigeria Limited

Sterling Bank PlcUnion Bank Plc

United Bank of Africa PlcWema Bank PlcZenith Bank Plc

Bankers

African Reinsurance CorporationContinental Reinsurance PlcWaica ReinsuranceHannover Reinsurance Company LimitedGeneral Insurance Company, IndiaSwiss Reinsurance Africa LimitedAIG EuropeKiln SyndicateChubb Limited

Reinsurers

Estate Surveyor and ValuerDiya Fatimilehin & Co.FRC/2013/NIESV/00000002773



Governance22 | Board of Directors26 | Corporate Governance

Report38| Complaint and Feedback

Statement40 | Independent Auditor's

Report44 | Company Information and

Summary of Significant Accounting Policies

Ÿ Visiting Professor, African Leadership Center, London

Ÿ Former Chief of Army Staff, Nigerian Army

Ÿ Former Chief of Defense Staff, Nigerian Army

Ÿ Former Chairman, Subsidy Reinvestment Programme

Ÿ Alumnus, National Defense University, Washington DC, USA

Ÿ Alumnus, Administrative Staff College of Nigeria

Gen. (rtd) Martin Luther Agwai, cfr.CHAIRMAN

Mr. Oye Hassan-Odukale, mfr.CHIEF EXECUTIVE OFFICER Retired 31 December, 2019

Board of Directors

Ÿ Chairman, FBN UKŸ Member, Executive Committee of the African

Insurance OrganizationŸ Past Chairman, Nigerian Insurers AssociationŸ Former Member, Federal Government of Nigeria’s

Committee for the Review of Insurance LawsŸ Munich Re FellowŸ Alumnus, University of Houston, Texas, USAŸ Alumnus, Harvard Business School, USA

Ÿ Director, First Bank of Nigeria Ltd.Ÿ Member, Royal Society of Mathematics

and the Institute of ActuariesŸ Former Director, Stanbic IBTC Bank PlcŸ Former Director, Union AssuranceŸ Alumnus, University of LondonŸ Alumnus, City University, LondonŸ Alumnus, Harvard Business School, USA

Mr. Tunde Hassan-OdukaleMANAGING DIRECTOR/CEOAppointed January 1, 2020


Ÿ Chairman, Andersen Tax AfricaŸ Director, Nigeria-South Africa

Chamber of CommerceŸ Director, Nigerian Economic Summit

GroupŸ Fellow, Institute of Chartered

Accountants of Nigeria (FCA)Ÿ Former National Senior Partner,

KPMG NigeriaŸ Former Chairman, KPMG AfricaŸ Alumnus, York University, Canada.

Mr. Oluseyi BickerstethNON-EXECUTIVE DIRECTOR

Ÿ Member of Nigerian Bar AssociationŸ Fellow, Chartered Institute of Arbitrators

(FCI) Arb London.Ÿ Former Attorney General and Commissioner

of Justice, Rivers StateŸ Former Minister of State for Petroleum

ResourcesŸ Former Minister of Foreign AffairsŸ Alumnus, Harvard Law School,

Massachusetts.

Mr. Odein Ajumogobia SAN.NON-EXECUTIVE DIRECTOR

Board of Directors Continued

Ÿ Former Director, Santam South AfricaŸ Former Chief Executive, African Life

Assurance, Johannesburg, South AfricaŸ Former Member, Board of the Life Offices

Association of South AfricaŸ Former Member, Ghana Investment Advisory

CouncilŸ Alumnus, Rhodes University, South AfricaŸ Alumnus, University of Cape Town, South

Africa

Mr. Jeremy RowseNON-EXECUTIVE DIRECTOR


Ÿ Director, Leadway Hotels LimitedŸ Director, Energy and Allied Insurance

Pool of NigeriaŸ Director, Nigeria Liability Insurance PoolŸ Associate, Chartered Insurance Institute,

LondonŸ Associate, Chartered Institute of

Arbitrators, UK.Ÿ Former Director, Prestige Assurance Plc.Ÿ Alumnus, University of Bristol, UK.Ÿ Alumnus, University of South Wales, UK.Ÿ Alumnus, Harvard Business School, USA

Ms. Adetola AdegbayiEXECUTIVE DIRECTOR

Ÿ Member, Chartered Institute of Arbitrators, United Kingdom

Ÿ Member, Nigerian Bar AssociationŸ Alumnus, University of LagosŸ Fellow, Institute of Chartered Secretaries

and Administrators, UK.

Mr. Olumide HansonCOMPANY SECRETARY

Mr. Martyn ParkerNON-EXECUTIVE DIRECTOR

Board of Directors Continued

Ÿ Chairman of Swiss Re Life & Health AfricaŸ Former Deputy Chairman of Vina Re in VietnamŸ Former Executive Director of Swiss Re Life and

Health AustraliaŸ Former Executive Director Swiss Re Asset

Management Hong KongŸ Former Chief Executive Officer of Swiss Re Life

and Health UKŸ Fellow, Chartered Insurance InstituteŸ Fellow, of London Chartered Insurance Institute


NAICOM/CA/AD

V/20

13/118

3


Introduction

Leadway Assurance Company Limited is committed to adhering with high standards of good corporate governance at all levels of its operations. The Board of Directors has continued to ensure the implementation of corporate governance principles that guarantee fairness, accountability and transparency in all its dealing within and outside the Company and its subsidiaries. Leadway complies with all laws, regulations, rules and guidelines, applicable to insurance business, including the Code of Business Ethics and the Nigeria Code of Corporate Governance issued by the Financial Reporting Council (FRC).

COMPOSITION OF DIRECTORS

The Board of Leadway comprises a total of seven directors as at 31 December 2019. This includes the Chairman, (who is an Independent Non-Executive Director), the Managing Director, two Executive Directors and one Non-Executive Director and two Independent Non-Executive Directors. The members of the Board are reliable, skilled and bring to the Board decades of experience and expertise which positively impacts the oversight responsibility of the Board. Their level of expertise has manifested in the strategic direction of the company and high quality of management policies formulated over the years.

SEPARATION OF THE ROLE OF THE CHAIRMAN FROM THE MANAGING DIRECTOR

The way and manner the company structured the roles of the Chairman and the Managing Director has assisted in averting overlaps of roles. The Chairman who is first among equals is responsible for the overall leadership of the Board and for creating enabling environment for the effectiveness of individual directors, while the Managing Director is responsible for the day-to-day running of the company to achieve overall efficiency of management controls. This is done in accordance with the Nigerian Code of Good Corporate Governance 2018.

GENDER DIVERSITY

Leadway Assurance understands that gender diversity is fundamental to the success and sustainability of the company and enriches discussions among directors, better reflects the company’s relationship with all of its stakeholders and allows for improved stewardship from a risk-management perspective. The company has its diversity policy and has committed to establish measurable objectives for achieving diversity on the Board and within management positions. The Company plans to achieve a 30% gender diversity over the next few years and strives to create a diverse and inclusive culture by deliberately promoting increased women representation on the Board, management positions and overall employees, based on availability of vacancy and appropriately-skilled candidates. The company is committed to improve other dimensions on diversity to reflect global best standard and will reflect its efforts in future disclosures.

Corporate Governance Report for the year ended 31 December 2019


PROCESS OF BOARD APPOINTMENT

The process for the selection, nomination and appointment of a candidate to the Board is essential to ensure the Company has an optimum combination of experience and commitment and achieve the effectiveness of the Board. Potential candidates are identified by referrals of suitably qualified individuals by other Directors; and/or engaging external consultants that will present diverse candidates from the pool of candidates sourced. The Nomination, Remuneration and Governance Board Committee is saddled with the responsibility of engaging, interview and recommending the suitable candidates, having regard to the expertise, integrity, qualification, age, experience, positive attributes, independence, competency, relationships, industry standing, diversity of gender, background, professional skills and personal qualities required to operate successfully as director. The Committee is further guided by the Succession and Diversity policies in its engagement.

Board Training and Induction

The Chairman, in conjunction with the Company Secretary, is responsible for ensuring that induction programmes are conducted for new Directors and a continuing education programme is in place for all Directors. The Continuing education is expected to assist directors to consistently familiarize themselves with their roles and responsibilities, Corporate Governance, the Company’s strategic plan, operations, and the business environment within which the company operates.

New directors undergo a three-day orientation and Induction programme which holds within three months of the director’s appointment and entail an engagement with the Management of the company coordinated by the Company Secretary. The various sessions provides directors with understanding of the company’s business, current strategy/business plan, Organization Structure, delegation of authority, Board and Board Committees’ annual plan, Corporate Governance and Risk Management information, the company’s Board approved policies and Code of Conduct. The session also provides an insight into the Financial and Capital Management of the company.

Directors are encouraged to attend internal and external seminars and workshops that are organized on the financial standards, new development within Corporate Governance and Mandatory trainings organized by the regulator, in order to enhance their skills and knowledge.

During the year, the directors of the company attended the following trainings/ seminars to enhance their knowledge in the discharge of their duties within the company.- Board IFRS 9 & 17 Awareness Training organized by Ernst & Young.- Insurance Directors Conference 2019 organized by National Insurance Commission and College of Insurance on Corporate Governance.

BOARD EVALUATION

The assessment of the effectiveness of the Board is key in the Board Governance Structure. The Board undergoes a rigorous evaluation process every year to assess the performance of the Board, its committees, individual directors and assessment of the Corporate Governance Practices. This exercise has been previously carried out by an independent external consultant with outcomes reported to the Board and the sectoral regulator.

Corporate Governance Report Continued for the year ended 31 December 2019



In 2017 and 2018, the Society for Corporate Governance and Ernst & Young respectively, carried out the evaluation of the Board, its committees, the Chairman, individual Directors, and the Company’s corporate governance practices.

The external evaluation that was conducted for the year 2018 was with reference to the National Insurance Commission Code of Corporate Governance 2009, best practice and readiness test against the principles in the Nigerian Code of Corporate Governance 2018 released by the Financial Reporting Council. This exercise consists of a one-one interview with directors and completion of Board effectiveness questionnaires.

In view of the requirement by the Nigerian Code of Corporate Governance 2018 which provides for Board Evaluation to be facilitated once every three years by an Independent External Consultant and having successfully carried out the evaluation of the last two years by Independent External Consultants, the evaluation for the year 2019 is being conducted internally by the Company’s Secretariat. The internally-driven Board Evaluation for the year 2019 is to provide an opportunity for the Board to frankly resolve the identified gaps that undermines the effectiveness of the Board. The feedback from the Board effectiveness review process will be discussed with the Board with identified action plan for resolution and the report will be submitted to the company’s regulator.

DIRECTORS STANDING FOR RE-ELECTION

In compliance with the Companies and Allied Matters Act Laws of the Federation of Nigeria 2004, one-third of the company’s directors are required to retire by rotation at the Annual General Meeting (AGM). This is applicable to directors who have been longest in office since their last election. Consequently, Mr. Jeremy Rowse and the Chairman, Gen. Martin Luther Agwai are up for retirement and are both eligible for re-election. They have both offered themselves for re-election.

The Nomination, Remuneration and Governance Committee has the responsibility to review and assess the performance of the Directors that are subject to re-election at the AGM and submits its recommendation to the Board for the proposed re-election being presented to the Shareholders for approval. The Committee makes its recommendation, taking into consideration, value contribution at Board and Board Committee meetings, deliverables on the expectations in relation to his role and responsibilities and continuing value to the Board through in-depth reasoning, knowledge, experience and expertise.


Gen. (rtd) Martin Luther Agwai (Chairman, Independent)

Mr. Oye Hassan-Odukale (Managing Director)

Mr. Tunde Hassan-Odukale (Executive Director)

Ms. Adetola Adegbayi (Executive Director)

Mr. Jeremy Rowse (Non-Executive)

Mr. Eugene Curley (Non-Executive)

Mrs. Mowunmi Sotubo (Non-Executive)

Mr. Martyn Parker (Non-Executive)

Mr. Odein Ajumogobia (Non-Executive, Independent)

Mr. Seyi Bickersteth (Non-Executive, Independent)

Meetings Held

Names

1

21st March, 2019

2

23rd May, 2019

3

8th August,2019

4

17th October,

2019

5

14th November,

2019

√

√ √ √ √ √ √

NYA

√ √

√

√ √ √ √ √

NYA

√

NLD

√

√ √ √ √ √

NYA

√ √

NLD

√

√ √ √ √

NYA

√ √

NLD

√

√ √ √ √

NYA

√ √

NLD

NLD NLD

Committees of the board

The Board committees have been engineered to ensure proper coordination and effectiveness and these committees are saddled with responsibilities which are aimed at enhancing the operations of the company. Over the years, the committees have rendered immense assistance to the Board through regular reporting. Below are the committees of the Board:

K e y : P r e s e n t *A p o l o g y N L D - N o L o n g e r a D i r e c t o r N Y A - N o t Y e t A p p o i n t e d√

BOARD RESPONSIBILITY

The Board is saddled with the responsibility of making policies for the company, reviewing corporate performance, monitoring strategic decisions while ensuring regulatory compliance, safeguarding shareholders' interest and fulfilling the expectations of stakeholders. The Board met five times in the last financial year and through their leadership, the company was able to achieve its set objectives. The record of the attendance is provided below:



a. Enterprise Risk Management and Technical Committee:

The Committee comprises three Non-Executive Directors and two Executive Directors. Mr. Jeremy Rowse Chairs the Committee and other members are Mr. Seyi Bickersteth (Independent), Mr. Odein Ajumogobia (Independent), Mr. Tunde Hassan-Odukale (Now Managing Director) and Ms. Adetola Adegbayi (Executive Director).

This committee assists the Board in carrying out its oversight responsibilities by:* Coordinating and overseeing the application and effectiveness of technical controls and analysis in the insurance activities;* Enhancing the quality, effectiveness and relevance of insurance technical reports and management information;* Overseeing the strategic risk management process and monitoring the quality, integrity, reliability and effectiveness of the process;* Reviewing the adequacy and effectiveness of controls on the development, introduction and maintenance of IT systems and processes.

The committee held four meetings in the year 2019 and the attendance of directors stated below:

Meetings Held

Names

1

19th March, 2019

2

21st May, 2019

3

6th August,2019

4

12th November,

2019

√

√ √ √ √

√

√ √ √ √

√

√ √ √ √

√

√ √ √ √

Mr. Jeremy Rowse (Chairman)

Mr. Odein Ajumogobia (Non-Executive, Independent)

Mr. Seyi Bickersteth (Non-Executive, Independent)

Mr. Tunde Hassan-Odukale (Now Managing Director)


Key: Present√



b. Audit & Compliance Committee

The Committee comprises three Non-Executive Directors and one Executive Director. Mr. Seyi Bickersteth (Independent) Chairs the Committee and other members are Mr. Eugene Curley (Non-Executive Director, now resigned), Mrs. Mowunmi Sotubo (Non-Executive Director, now resigned) and Mr. Tunde Hassan-Odukale (Now Managing Director).

This committee assist the Board in carrying out its oversight responsibilities by:* Monitoring the Nigerian regulatory environment for threats and/or opportunities* Reviewing the Company’s relationship with relevant regulatory agencies and authorities and recommend required steps and activities for improvement in such relationships;* Monitoring overall compliance by the Company with the provisions of the National Insurance Commission (NAICOM) and other relevant industry regulations;* Co-coordinating and overseeing the effectiveness of the Company’s audit management and shall assist the internal and external Auditors in preparing financial reports;


c. Finance, Investment & General Purpose Committee

The Committee comprises two Non-Executive Directors and two Executive Director. Mr. Odein AJumogobia (Independent) Chairs the Committee and other members are Mr. Jeremy Rowse (Non-Executive Director), Mr. Tunde Hassan-Odukale (Now Managing Director) and Ms. Adetola Adegbayi (Executive Director).

This committee assists the Board in carrying out its oversight responsibilities by:* Reviewing Management Accounts and reporting to the Board on Best Practice;* Developing, monitoring and reviewing efficiency of the Company’s investment policies;* Determining, developing and reviewing the Company’s investment parameters consistence with business trends, Company’s investment capacity and compliance obligations;* Ensuring at all times that the Company’s investment policies reflect the objectives of safety and maintenance of fair returns on investments;* Establishing standards, rules and guidelines for the Company’s investment management operations;* Evaluating the value of the daily market-to-market portfolios and make proposals to the Company’s Board accordingly;* Reviewing from time to time the Company’s investment strategy with a view to sustaining medium to long term competitive edge.

Meetings Held

Names

1

20th March, 2019

2

22nd May, 2019

3

7th August,2019

4

13th November,

2019

√

√

√

√

√

√

√

√

√

√

√

√

Seyi Bickersteth (Independent Chairman)

Mr. Eugene Curley (Non-Executive Director, now resigned)

Mrs. Mowunmi Sotubo (Non-Executive Director, now resigned)


Key: Present NLD - No Longer a Director√

NLD NLD NLD

NLD



Meetings Held

Names

1

20th March, 2019

2

22nd May, 2019

3

7th August,2019

4

13th November,

2019

√ √ √ √ Mr. Odein Ajumogobia (Independent, Chairman)

Mr. Jeremy Rowse (Non-Executive Director)



Key: Present √

√ √ √ √

√ √ √ √

√ √ √ √

d. Nomination, Remuneration & Governance Committee

The Committee comprises two Non-Executive Directors. Mr. Eugene Curley (Non-Executive Director) Chairs the Committee and the other member is Gen. Martin Luther Agwai (Independent).

This committee assist the Board in carrying out its oversight responsibilities by:* Annually reviewing the structure, size and composition (including the skills, knowledge, experience and diversity) of the Board and other Committees;* Giving full consideration to and ensuring the company has a succession policy and planning for the Chairman of the Board, Managing Director, all other Executive Directors, Non-Executive Directors and other Senior Management positions;* Being responsible for the process of identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise;* Establishing a formal and transparent process for Board appointments, including establishing the criteria for appointment to the Board and Board committees, reviewing prospective candidates’ qualifications and any potential conflict of interest; assessing the contribution of current Directors against their re-nomination suitability, and making appropriate recommendations to the Board;* Developing a process for, and ensuring that the Board undertakes, an annual performance evaluation of itself, its committees, the Chairman and individual Directors, as well as the Company’s corporate governance practices.* Undertaking the annual assessment of the independent status of Independent Non-Executive Directors (INED);* Considering the extent to which the company’s governance arrangements are consistent with the various Corporate Governance Codes, and making recommendations to the Board accordingly;* Reviewing the governance section of the annual report and making recommendations to the Board for approval;* Develop, review, administer and recommend to the Board for approval of Corporate Governance policies;* Reviewing annually the Key Performance Indicators (KPIs) set for the Chief Executive and Executive Directors by the Board and their performance evaluation;* Ensuring the development and periodic review of Board charters, Board committee charters and other governance policies, such as the code of ethics, conflict of interest and whistle blowing policies among others.

The committee held two meetings in the year 2019 and the attendance of directors stated below:

Meetings Held

Names

1

20th March, 2019

2

22nd May, 2019

3

1st November,

2019

4

13th November,

2019

√ √ Mr. Eugene Curley (Non-Executive Director, Chairman)

Gen. Martin Luther Agwai (Independent)

Key: Present NLD - No Longer a Director √

√ √ √ √

NLDNLD




CUMMULATIVE YEARS OF SERVICE

a. Tenure of directors

The tenure for the Managing Director and the Executive Directors are determined by the Board taking into account performance, the existing succession planning mechanism, continuity of the Board and the need for continuous refreshing of the Board. The tenure of each of the company’s Non-Executive Director is for a defined period and can be re-elected for additional terms subject to satisfactory performance and approval by the shareholders. However, the principles of the Nigerian Code of Corporate Governance 2018 caps the tenure of an Independent Non-Executive Director at a cumulative term of nine years.

1 Gen. (rtd) Martin Luther Agwai (Chairman, Independent)

2 Tunde Hassan-Odukale (Executive Director)

3 Jeremy Rowse (Non-Executive)

4 Adetola Adegbayi (Executive Director)

5 Seyi Bickersteth (Non-Executive, Independent)

6 Odein Ajumogobia (Non-Executive, Independent)

7 Martyn Parker (Non-Executive)

Directors Directors

10th November, 2016

1st January, 2020

31st July 2007

6th December, 2012

1st January, 2017

1st January, 2017

3rd February, 2020

Years of Service

3 years 3 months

Two months

12 years, 3 months

7 years, 3 months

3 years, 1 month

3 years, 1 month

1 month

Our erstwhile Managing Director, Oye Hassan-Odukale retired from the Board effective 31st December, 2019 having successfully steered the wheels of the company for the past thirty-five years.

The Board of Directors and the company’s regulator, the National Insurance Commission has approved the appointment of Tunde Hassan-Odukale as Managing Director effective 1st January, 2020.

The company is committed to consistently refreshing its Board and Board Committees to guarantee improved value contribution to the company in line with global best practice.

b. External auditor

KPMG Professional Services was appointed as the company’s External Auditor in 2018 following the expiration of the 5 year tenure of PricewaterhouseCoopers Chartered Accountants as required by the National Insurance Commission Code of Corporate Governance 2009. This was before the advent of the Nigerian Code of Corporate Governance 2018 which provided for a 10 year tenure to External Auditors.

The Company went through a tender process and after careful review of the value proposition of the bidders and the commitment to avoid potential conflict of interests in relation to non-audit services and ensure the independence of the auditor, KPMG was selected and approved by the company’s shareholders at the 2018 AGM.

The audit partner leading the 2019 financial audit is Kabir Okunlola and has held the role for two years. The role of audit partner will be rotated after completion of the 2022 year end audit in line with the Nigerian Code of Corporate Governance 2018 and best practice.

c. Statement on availability of code of business conduct and ethics

The company has a Board approved Code of Business Conduct and Ethics which sets out broad principles and practices that guide each and every member of the Board, Management and employees in their conduct and decision making for the company. The directors, Management and employees are abreast with the Code of Business Conduct and Ethics and have declared their understanding of their fiduciary duty to shareholders and other stakeholders of the Company.



HIGHLIGHTS OF HUMAN RESOURCES MANAGEMENT

HR policy highlights

The Company has established the underlined Human Resources policies which is undergoing Management review as part of the company’s commitment to ensure continued applicability and growing changes in the Human Resource space and workspace dynamism. •Learning and Development Policy focuses on the provision of effective and appropriate training and development for all employees to constantly update their knowledge, skills, abilities and attitudes using the 70:20:10 learning framework. It also fosters professional development by catering for subscription and certification with respective globally recognized bodies. Every employee is guaranteed at the minimum 16 hours of training annually.•Performance Management Policy is to establish and maintain a performance culture, creating an enabling environment for employees to develop their abilities and achieve optimal possible potential to ensure a workplace where the staff performance review process is fair, consistently applied and shall not be perceived nor used as a punitive system. The process is designed to measure the achievement of company strategic goals.• Recruitment & Selection Policy seek to attract, select, recruit and retain people with the right skill set, expertise, experience and qualifications to meet business aspirations, whilst offering a rewarding and fulfilling career with opportunities for growth and personal development. The recruitment process is driven by the Workforce plan, utilizing the Build, Borrow and Buy strategy.

• Compensation & Benefit Policy adopts a compensation philosophy that ensures employees are equitablyremunerated within competitive market salary scales to drive and reward excellent performance utilizing global recognized frameworks. The aim is to maintain a pay structure that attracts, motivates and retains the highest caliber of talents at all levels. These include recognition awards, short and long term incentives pay as well as non-monetary rewards, benefits and perquisites.• Social Media (Internet Usage) Policy is to enable employees to participate online in a respectful, relevant way that protects the company’s reputation. The policy is intended to protect the business confidentiality, its network, computing resources and information assets.• Flexi – Work Policy aims to encourage flexible working arrangements with the dynamics in the business environment. It recognizes that a better work-life balance can improve employee motivation, productivity, improved competitiveness while reducing staff turnover and ensuring employees fulfil their work requirements as well as other family/personal commitments.• Disciplinary Policy is designed to correct unacceptable conduct or behaviour of employees where there is a breach of any rule, regulation, policy or procedure. The company takes comprehensive approach regarding discipline and will consider all facts before a decision is taken.• Grievance Policy is designed to provide a transparent framework to deal with conflicts that may arise out of employment relationships. This is in alignment with company’s desire to provide an environment that is productive, encourages growth and achieves business objectives. The process ensures that all employees are treated in a fair and consistent manner. • Expatriate Policy provides a guide to ensuring standardized management of expatriates within the company, ensuring established need, value delivery, knowledge transfer, optimizing the cost in the engagement of expatriates and consistency in mobility policy.



WORKPLACE INITIATIVES

• Capability Building – One of such is Leader-led sessions, a business continuity initiative that ensures knowledge transfer across the company it provides the opportunity to directly address knowledge gaps from day to day operation and increase breadth of knowledge in teams. We also have instituted, job rotation and expansions, mentorship and coaching frameworks, Talent Exchange programme and pipeline building, Quarterly Performance Reviews where we proactively assess market dynamics and align our strategies accordingly.

• Employee Engagement and Support – The Company recognizes that employee engagement is a key driver of productivity which directly impacts profitability. It has multifaceted initiatives to feel the pulse of the workforce and creating tools and drivers for such engagements that drive workplace productivity. These include Annual Engagement Surveys, Town Halls and Village Meetings, Open days, Dial in sessions, CSR events etc. In addition we practice customized onboarding systems, Team Bonding, Happy Hour, motivational talks, career conversations. We have structured support systems such as fund channels, Health plans and annual medical checks, Gym, Crèche, Corporate Fitness, interdepartmental-games, Employee Wellbeing Sessions as well as Employee Assistance Programs in place to drive and create an exceptional employee experience.

•Diversity and Inclusion – As an equal opportunity organization, the company is committed to an inclusive culture that respects and embraces the diversity of employees, clients and community. This aimed to attract, develop and retain the best people from all culture, ethnicity, gender, abilities, background and experiences.

• Acculturation – This initiative aims to entrench the company’s core values thereby sustaining the right culture among employees in order to drive business performance.

MD

ED

Divisional Director

Senior Associate Director

Associate Director

Associate

Senior Analyst

Analyst

Graduate Trainees

INTERNAL MANAGEMENT STRUCTURE



HIGHLIGHTS OF PROGRAMS ON SOCIAL ISSUES

HIGHLIGHTS OF CASES OF CLAW BACK

In line with the company’s Claw Back policy, the Nomination, Remuneration & Governance Committee has reviewed the company’s account and financial performance to ascertain if there has been undeserved award arising from the company’s account and financial performance that has been materially false, misstated, misleading, erroneous, or there has been instances of misdemeanour, fraud, material violation of Company policy or material regulatory infractions. The Committee has satisfied itself that there is no incidence necessitating the company to recover excess or undeserved reward, such as bonuses, incentives, share of profits, or any performance-based reward, from Directors and senior employees.

FINES AND PENALTIES

This has been disclosed in notes 41 & 42

NATURE OF ANY RELATED PARTY TRANSACTIONS This has been disclosed in note 40

DIRECTORS’ RENUMERATION POLICY

Remuneration policy of Leadway was approved in 2019 and shall apply for a period of three (3) years except there is an earlier review to ensure its continued appropriateness on applicability. The remuneration of Non-executive directors is not necessarily market leading but reflective of the prudence and conservatism of the company without undermining sufficient remuneration commensurate with the dedication and responsibility of directors.The remuneration of executive directors is fairly competitive and incentivizes the directors to achieve the business plan, in alignment with company’s long term strategy and to promote the retention of executive directors.The remuneration of directors takes into primary consideration the performance of the company and prevailing economic situation.

Remuneration Elements

Basic Salary

Salaries earned during the payroll period.

Variable Pay

A performance based sum awarded to Executive Directors for attaining or exceeding their assigned KPIs.

Long term incentive plan

A plan created to reward directors for attaining company’s long term goals and shareholders’ interest. This aids the retention of key personnel and promotes commitment to long term growth.

Payment mode

Monthly

Annually

Quantitative

Gross Premium, Profit Before Tax (PBT), Taxes, R e t u r n o n I nve s t e d C a p i t a l ( RO I C ) a n d performance of Leadway.

·Qualitative

Strategic milestones and initiatives that need to be achieved and implemented on areas such as strategy, innovation, business development, synergy, human capital management, financial management and societal development.



Notes of this report highlights the remuneration paid to directors.

SUMMARY OF RISK MANAGEMENT FRAMEWORK

Introduction The Summary of the Risk Management Framework is contained in the Risk Management disclosures on page 72.

STATEMENT ON THE COMPANY’S ESG ACTIVITIES

The Company is aware of its responsibilities on Environmental, Social and Governance activities and is committed to economic growth and social value creation by supporting the development of the insurance industry, supporting internal and external stakeholders as well as the society in which it operates while promoting the education of the present and next generations. The Company also impacts tremendously the lives of the less privileged in the society through its corporate social responsibility, ensuring nationwide reach from Internally Displaced Persons to public schools and physically challenged persons in the parts of the country.

STATEMENT ON THE BOARD’S LEVEL OF APPLICATION OF THE CORPORATE GOVERNANCE CODE

The Board of Leadway Assurance engaged the services of Ernst & Young to evaluate its level of compliance with the Nigerian Code of Corporate Governance. The Board, in its commitment to ensure compliance with the Code, has taken steps to remedy gaps identified and is now sufficiently compliant with the Code. The Board is confident that the Corporate Governance Report in the 2020 annual report would reflect the Company’s adequate compliance and application of the Code.

BY ORDER OF THE BOARD

Olumide HansonFRC/2019/NBA/00000019064Company Secretary121/123 Funso Williams AvenueIponriLagos5 March 2020

Category-Fixed/Variable

Fixed

Fixed

Fixed

Component description

A fixed annual sum provided to Non- Executive Directors for their ongoing contribution to the Board and as an incentive to attract and retain talent. This is payable on a quarterly basis.

A payment made to Non-Executive Directors on a per-meeting basis. This is condition on attendance (physical or virtual) which is a prerequisite for remittance.

A fixed annual amount paid to Non-Executive Directors for the medical needs and upkeep. This is payable on the first working day of every year.

NON-EXECUTIVE DIRECTORS

Component

Fees

Meeting/Sitting allowance

Medical Allowance



Strategy for Handling Customer Feedback and Complaints

We are currently running our three year planning horizon (2017 – 2020). As customers progressively become more informed and erudite, there is greater demand for customized and personalized insurance products and services.

One of our key strategy to providing an enhanced customer experience is our provision of a 24/7 customer service. This ensures continuous customer engagement through our complaints management and customer resolution. Our Investment in technology has grown tremendously to provide our customers with the option of self –service . To this regard a continuous gear to enhancing our own data management is very pertinent. We have also improved our feedback gathering mechanisms. Our services have been extended to managing our customers efficiently through our digital platforms which includes our Mobile Apps, Web chats, WhatsApp and CRM integration. We are constantly incorporating customer feedback from these channels into product design/ redesign. This has resulted in improved product acceptability and reduced cases of product failures and attainment of customer goodwill.

With the above, Leadway seeks to expand its customer loyalty with an all-inclusive view and wider understanding of the customer. Customer journey maps and plans are being developed based on insights and analysis from direct feedback from customers. This has proven to be very effective in understanding customer’s pain points and boosting our customer retention.

Complaints ChannelsWe have provided various channels for customers to provide feedback on our products and services. These platforms include:

• Our Leadway Assurance Company Limited Customer Service front desks, corporate office and designated branches for walk-in customers

• Complaint e-mail channel; [email protected]• Our Leadway Assurance Company Limited hotlines; 01-2700700, 01-2800700, 08129997027, 08129997178• Our website platform; www.leadway.com• Our Leadway Mobile App• Our Leadway WhatsApp - 08080577724 • Social media - Facebook - www.facebook.com/LeadwayAssurance/ - Twitter - @LeadwayInsure - Google Plus - Plus.google.com/+LeadwayAssurance - Linkedin - www.linkedin.com/company/leadway-assurance-co--ltd

Customers can also pay a visit to any of our Leadway Assurance Company Limited Welcome Centers located across the country for business enquiries and resolution.

Resolution Mechanism

At Leadway Assurance Company Limited, we have put in place a standard system to ensure that customers’ feedback are received and promptly resolved. For this purpose we have a dedicated Customer Service Department (CSD) which is responsible for the prompt investigation and resolution of customers’ complaints within the approved period. The Customer Service Department liaises with other units within the organization and ensures that customers’ complaints are satisfactorily resolved.

Customers’ complaints are stream-lined based on the type of complaints to provide an enabling environment for proper monitoring, proper documentation and effective feedback process of received complaints.

The process flow of customer complaint and resolution is as follows:

• The customer care officer acknowledges and attends to the various customers’ complaints.• The complaint is reviewed and it is determined if the complaint could be resolved at first-level.• Where the complaint can be resolved at the first level, a resolution is immediately provided to the customer.• If such complaint cannot be resolved at the first level, the customer care officer creates a case on our Dynamics CRM

(Customer Relationship Management) application. This will in turn generate a Case ID number for escalation and tracking of case to resolution.

• Customer Care officer forwards and follow-up on the complaint with the appropriate unit in the organization to handle.• Upon resolution, the customer is contacted and the resolution is explained to the customer.• The case is closed and marked as resolved.

In addition to our present process, we are currently building a more robust CRM to adequately manage all complaints and to give the best response time in this area of our services.

Complaint and Feedback Statement


http://www.leadway.com

Customers’ loyalty and opinion on products

To enrich our customers experience we also periodically evaluate public/customer opinion about our services, products and policies. The evaluation is conducted in various ways including:

• One-on-one focus meetings with key customers• Interviews with selected customers• Online Customer Feedback Survey and Questionnaires administered to customers

This is to afford our organization the opportunity of receiving customers’ perception about the company, in order to ensure that efforts can be put in place to close such gap(s) in our service delivery or improve upon the process, service or product.

Feedback on Customers’ Complaints to Leadway Assurance

Feedback on customers’ complaints is provided to Management and other relevant Units in the organization

The feedback gathered ensures that:

• Leadway Assurance Company Limited retains her customers as customers feel appreciated and respected,• The quality service delivery at Leadway Assurance Company Limited is maintained and made uniform across

board.• A reliable source of identifying improvement opportunities is presented to management.• A reliable source of data on customers’ complaints and expectations is collated.

The feedbacks are circulated to management staff through the company’s internal information channel for the general information of all staff.

Report of complaints received and resolved by the organization between January-December 2019.

Complaints not resolved within the turnaround time, can be attributed mainly to the unavailability of these customers either via mail or phone call after resolution of their complaint but all complaints are usually treated within 24hrs (depending on the source of the error).

Month

JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberTotal

Complaints received

during the year

1036131584224

49

Number of complaints

resolved

725131484123

41

Number complaints unresolved

------------

Number of unresolved complaints

within SLA*311---

1--

1-

18


Complaint and Feedback Statement Continued

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of Leadway Assurance Company Limited

Report on the Audit of the Consolidated and Separate Financial Statements

OpinionWe have audited the consolidated and separate financial statements of Leadway Assurance Company Limited (“the Company”) and its subsidiary (together, “the group”), which comprise the consolidated and separate statements of financial position as at 31 December, 2019, and the consolidated and separate statements of profit or loss and other comprehensive income, consolidated and separate statements of changes in equity and consolidated and separate statements of cash flows for the year then ended, and notes, comprising significant accounting policies and other explanatory information, as set out on pages 44 to 155.In our opinion, the accompanying consolidated and separate financial statements give a true and fair view of the consolidated and separate financial position of the Company and its subsidiary as at 31 December, 2019, and of its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) and in the manner required by the Companies and Allied Matters Act, Cap C.20, Laws of the Federation of Nigeria, 2004 and the Financial Reporting Council of Nigeria Act, 2011 and the Insurance Act 2003 and relevant National Insurance Commission of Nigeria (“NAICOM”) Circulars.

Basis for OpinionWe conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the consolidated and separate Financial Statements section of our report. We are independent of the Group and Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the consolidated and separate financial statements in Nigeria and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Valuation of Insurance Contract LiabilitiesThe Company has significant life and general insurance contract liabilities of N296.70 billion (2018: N 225.44 billion). The valuation of insurance contract liabilities involves high estimation uncertainties and management makes significant judgments over uncertain future outcomes.

KPMG Professional ServicesKPMG TowersBishop Aboyade Cole StreetVictoria IslandPMB 40014, FalomoLagos

Telephone 234(1) 271 8955234(1) 271 8599

Internet home.kpmg/ng

Independent Auditor’s Report


Provisions for reported claims are based on historical experience, however, the eventual liabilities may differ from the estimated amounts. Furthermore, the estimated liability for claims that have occurred but are yet to be reported in respect of general insurance contracts involve economic assumptions about inputs such as inflation rate, ultimate loss ratio and discount rates, hence the eventual outcome is uncertain.

The actuarial assumptions used in the valuation of life insurance contract liabilities are judgmental, particularly with respect to mortality rates, expenses and discount rates.

The level of complexity, the assumptions and judgment involved in estimating these amounts make insurance contract liabilities a matter of significance to our audit.

How the matter was addressed in our audit

Our audit procedures included the following:• We tested the accuracy and completeness of the data used in actuarial valuations by checking selected samples of the claims paid, outstanding claims and underwriting information to the underlying data.• We engaged our actuarial specialists to challenge the appropriateness of the methodology used by the Company's external actuary in calculating the insurance contract liabilities. This involved an assessment of the appropriateness of the valuation methods, taking into account industry practice and specific product features of the Company.• With the assistance of our actuarial specialist, we evaluated the reasonableness of the actuarial assumptions used by the Company's external actuary and independently performed liability adequacy tests on insurance contract liabilities including assumptions and estimates on the projected cash flows, basic chain ladder runoff period, inflation rate, mortality and discount rate by comparing them to the Company specific data and market experience.• We assessed whether the Company's valuation methodology and assumptions were consistent between reporting periods. We were also assisted by our actuarial specialists in this regard.

The Company's accounting policy on valuation of insurance contract liabilities and related disclosures are shown in notes 2.13 and 2.14 (accounting policy), note 4(a) (critical accounting estimates and judgments) and note 22 (insurance contract liabilities) respectively.

Other InformationThe Directors are responsible for the other information. The other information comprises its corporate profile, directors' report, statement of directors' responsibilities, corporate governance report, complaint and feedback statement management discussions and analysis, value added statement, five year financial summary, general business statement of financial position, general business statement of comprehensive income, general business revenue account, life business statement of financial position, life business statement of comprehensive income, life business revenue account, deposit administration revenue account, life business annuity statement (but does not include the consolidated and separate financial statements and our auditor’s report thereon) which we obtained prior to the date of this auditor'sreport. It also comprises the Chairman's statement, Leadway at a glance, information on Leadway subsidiary, branch directory report and corporate information (together "the outstanding reports"), whichare expected to be made available to us after the date of this auditor’s report.Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

Independent Auditor’s Report Continued


In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information and in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, on the other information obtained prior to the date of the auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.When we read the outstanding reports, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of the Directors for the Consolidated and separate Financial StatementsThe Directors are responsible for the preparation of consolidated and separate financial statements that give a true and fair view in accordance with IFRSs and in the manner required by the Companies and Allied Matters Act, Cap C.20, Laws of the Federation of Nigeria, 2004 and the Financial Reporting Council of Nigeria Act, 2011, the Insurance Act 2003 and relevant National Insurance Commission of Nigeria (" NAICOM ") Circulars, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement. whether due to fraud or error.In preparing the consolidated and separate financial statements, the directors are responsible for assessing the Group and Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and Company or to cease operations or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Consolidated and separate Financial StatementsOur objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:Ÿ Identify and assess the risks of material misstatement of the consolidated and separate financial

statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Ÿ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group (and Company)’s internal control.

Ÿ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

Ÿ Conclude on the appropriateness of directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group (and Company)’s ability to continue as a going



concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group (and Company) to cease to continue as a going concern.

Ÿ Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Ÿ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identified during our audit.

We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory RequirementsCompliance with the requirements of Schedule 6 of the Companies and Allied Matters Act, Cap C. 20, Laws of the Federation of Nigeria 2004 and Section 28(2) of the Insurance Act 2003

In our opinion, proper books of account have been kept by the Company, so far as appears from our examination of those books and the Company’s statement of financial position and statement of profit or loss and other comprehensive income are in agreement with the books of account.

Kabir O. Okunlola, FCAFRC/2012/ICAN/00000000428For: KPMG Professional ServicesChartered Accountants22 May 2020Lagos, Nigeria



1 General information Leadway Assurance Company Limited is a company incorporated and domiciled in Nigeria. The address of its

registered office is NN 28/29 Constitution Road, Kaduna State, Nigeria. The Company was incorporated as a private limited liability company on 22 September 1970. It obtained a license to operate as an insurance company in January 1971 and commenced business in January 1971.

The Company is principally engaged in the business of providing risk underwriting and related financial services to its customers. Such services include provision of life and general insurance underwriting insurance risks to both corporate and individual customers.

2 Summary of significant accounting policies The principal accounting policies applied in the preparation of these consolidated financial statements are

set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the Leadway Assurance Company Limited.

2.1 Basis of preparation These financial statements have been prepared in accordance with International Financial Reporting

Standards (IFRS) and IFRS Interpretations Committee (IFRIC) as issued by the international Accounting Standards Board (IASB)

The consolidated financial statements have been prepared under the historical cost convention except for the following:

i. Financial instruments at fair value through profit or loss ii. Available for sale financial assets measured at fair value iii. Investment properties measured at fair value iv. Revaluation of land and buildings measured at fair value v. Insurance liabilities measured at fair value of estimated future cashflows

Use of estimates & judgements : The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 4.

Financial & functional currency: These consolidated financial statements are presented in Naira which is the

groups functional currency. All amounts are in thousands unless otherwise stated

Company Information and Summaryof Significant Accounting Policies for the year ended 31 December 2019


Effective date1 January 2019

1 January 2019

CommentsIFRIS 16 was issued in January 2016. It will result in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-term and low-value leases. The accounting for lessors will not significantly change.

This is the first set of company financial statements in which IFRS 16 'Leases' has been applied, the related changes to significant accounting policies are described in note 2.12

The interpretation is to be applied to the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under IAS 12.

If an entity concludes it is not probable that the taxation authority will accept an uncertain tax treatment, the entity shall reflect the effect of uncertainty in determining the related taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates.

If an uncertain tax treatment affects current tax and deferred tax (for example, if it affects both taxable profit used to determine current tax and tax bases used to determine deferred tax), an entity shall make consistent judgments and estimates for both current tax and deferred tax.

2.2 Changes in accounting policy, amendments and disclosures

2.2.1 New and amended standards adopted by the company The following new or revised standards and amendments which have a potential impact on the company are effective

for the year ended 31 December 2019 and have been applied in preparing these consolidated financial statements.

StandardIFRS 16, ‘Leases’

IFRIC 23, ‘Uncertan Over Income Tax Treatments’


Company Information and Summaryof Significant Accounting Policies Continued

for the year ended 31 December 2019

2.2.2 New standards and interpretations not yet effective The following new or revised standards and amendments which have a potential impact on the company are

not yet effective for the year ended 31 December 2019 and have not been applied in preparing these consolidated financial statements. The company also plans to apply all the standards and amendments disclosed below once they are applicable. However, the Company's assessments of the new standards and amendments is not yet concluded but is expected to have significant impact on our Company operations and financial position

IFRS 9 Financial Instruments (Effective 1 Jan 2018)

IFRS 9, Financial instruments, issued by the IASB in July, 2014, fully replaces IASB 39 and provides a new approach on how to classify financial instruments based on their cash flow characteristics and the business model under which they are managed. Furthermore, the standard introduces new rules for forward-looking impairment model for debt instrument and provides new rules for hedge accounting.

It can be assumed that the main impact from IFRS9 will arise from the new classification rules leading to more financial instrument being measured at a fair value through income as well as the new impairment model. Interdependencies with IFRS17 will need to be considered to assess the ultimate combined impact of both standards.

The amendments to IFRS4, Applying IFRS9 Financial Instruments with IFRS4 Insurance Contracts, issued in September 2016, allow entities that issue insurance contracts within the scope of IFRS 4 to defer the implementation of IFRS 9 until January 2021 under certain circumstances. It is to be noted that the IASB has recently proposed to defer the IFRS9 effective date for such entities in scope by another year until 2022.

Given the strong interrelation between the measurement of direct participating insurance contracts and the underlying assets held, the Leadway Assurance Company has decided to use the option to defer the full implementation of IFRS 9 until IFRS 17 becomes effective.

In order to qualify for temporary exemption, an entity has to prove that its activities are predominantly connected to insurance as of 31 December 2015. Under the amended IFRS4, this condition is met if the insurer carries significant liabilities arising from contracts within the scope of IFRS4. Significant insurance-related liabilities are given, among others, if the percentage of the total carrying amount of liabilities connected with insurance relative to the total carrying amount of all liabilities is greater than 90%. A reassessment at a subsequent annual reporting date is required if, and only if, there was a change in the entity’s activities during the annual period that ended on that date.

As of 31 December 2015, the Leadway Assurance Company recorded a total amount of liabilities connected with insurance of N114.6b, which represented more than 90% of its total liabilities of N119.3b. Moreover, of the amount connected with insurance contract, N109.2b were related to liabilities arising within the scope of IFRS 4. Other insurance related liabilities amounted to N5.4b and included mainly other liabilities like trade payables. The Company did not have any non-derivative investment contract liabilities measured at fair value through income statement. No change in the activities of the Leadway Assurance Company occurred subsequently that would have required a reassessment.

IFRSIFRS 17, ‘Insurance Contract’

Effective DateJanuary 2023

Key RequirementsIFRS 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of the standard. The objective of IFRS 17 is to ensure that an entity provides relevant information that faithfully represents those contracts. This information gives a basis for users of financial statements to assess the effect that insurance contracts have on the entity's financial position, financial performance and cash flows


Company Information and Summaryof Significant Accounting Policies Continued for the year ended 31 December 2019

As At 31st Dec 2019

Cash and cash equivalentDebt Securities:Treasury BillGovernment BondsCorporate BondsSub TotalLoans and advancesOther Assets

Equity Securities-QuotedEquity Securities-UnquotedOthersSub Total

Grand Total

CompanyFINANCIAL ASSET UNDER IFRS 9 CLASSIFICATION OF ASSET

Fair ValueN’000

26,210,607

5,178,618 29,341,025

6,638,943 41,158,586

1,229,744 529,508

- ---

69,128,445

Fair Value Change

- 2,571,954

(15,425) 2,556,529(320,695)

(35,762)

- ---

2,200,072

Fair Value

- - ----

15,487,864 6,186,378

21,674,242

21,674,242

Fair Value Change

- - ----

(2,051,933) 579,704

(1,472,229)

(1,472,229)

***These exclude those that meet the definition of held for trading under IFRS 9 or those managed and whose performance is evaluated on fair value basis.

Investment GradeB2B2A+Not rated

CompanyCARRYING AMOUNT OF FINANCIAL ASSET THAT MEET SPPI CRITERION BY RATING

Rating Agency

MoodyMoodyOCR

Cash and cashEquivalents

---

26,210,60726,210,607

Treasury Bill

5,178,618---

5,178,618

Government Bonds

29,341,025---

29,341,025

Corporate Bonds

-6,459,633

-179,310

6,638,943

Others

---

1,759,2521,759,252

***Financial Assets that meet SPPI All Other Financial Asset




Prepayment Features with Negative comparison (Amendments to IFRS 9)

This amendment was published to address the concerns about how IFRS 9 'Financial Instruments' classifies particular prepayable financial assets. In addition, the IASB clarifies an aspect of the accounting for financial liabilities following a modification. The amendments are to be applied retrospectively for fiscal years beginning on or after 1 January 2019, i.e. one year after the first application of IFRS 9 in its current version. Early application is permitted so entities can apply the amendments together with IFRS 9 if they wish so.

2.5 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates(the ‘functional currency’). Except otherwise stated the consolidated financial statements are presented in thousands of Naira (NGN), which is the Company’s functional and presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate on the date when the fair value was determined. Non-monetary assets that are measured based on historcial cost in a foreign currency are translated at the exchange rate on the date of the transaction.

Foreign exchange gains and losses that relate to borrowings are presented in the statement of comprehensive income within ‘finance income or cost’.



Changes in the fair value of debt securities denominated in foreign currency and classified as available for sale are analysed between translation differences resulting from changes in the fair value of the security, and translation differences arising from changes in amortised cost. Translation differences related to changes in amortised cost are recognised in statement of comprehensive income while translation related to changes in fair value are recognised in other comprehensive income.

Translation differences on non-monetary financial assets and liabilities held at fair value through statement of comprehensive income are reported as part of the fair value gain or loss. Translation differences on non-monetary financial assets such as equities classified as available-for-sale financial assets are included in ‘other comprehensive income’. except on impairment, in which case foreign currency differences that have been recognised in OCI are reclassified to profit or loss.

The assets and liabilities of foreign operations including goodwill and fair value adjustments arising on acquisition are translated at the exchange rate on the reporting date. The income and expenses of foreign operations are translated at the exchange rate at the dates of transactions.Foreign currency differences on foreign operations are recognised in OCI and accumulated in the translation reserve, except to the extent that the translation difference is allocated to NCI.




2.6 Financial assets and liabilities

In accordance with IAS 39, all financial assets and liabilities (including derivative financial instruments) have to be recognised in the consolidated financial statements and measured in accordance with their assigned categories.

Category (as defined by IAS 39)

Sub-classesClasses as determined by the Company

Financial assets

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss

Listed Debt SecuritiesListed Equity securities Shares

Federal Government of Nigeria bonds

Held for tradingListed Equity securities

Cash and cash equivalent

Loans and receivables

Cash in hand and bankPlacementsTreasury bills with original maturity not more than 90 days.

Loans and advances

Due from reinsurers

Commercial loansLoans to policyholdersAgency loansAdvances under finance lease

Trade receivablesInsurance receivables

Due from contract, brokers, agentsand Insurance companies

Reinsurance assetsOther receivables Other receivables

SharesListed equity

Unlisted equity Shares

Listed debtsecurities

State Government bondsFGN Treasury billsCorporate bondsEurobondsFGN bonds

Available for sale

Investmentsecurities

NilNilNilFinancial liabilities at fair value through P&L

Financial liabilities

Financial liabilities at amortised cost

Trade payables

Other liabilities

Insurance contract liabilities

Borrowings

Reinsurance payableInsurance payableCommission payableInvestment contract payableAccrued expensesOutstanding claimsLife fundsTerm loansOthers

2.6.1. Financial Assets

Initial recognition Regular-way purchases and sales of financial assets are recognised on the settlement date i.e. the date on which the

company receives value for a purchase/sale of assets. All financial assets are initially recognized at fair value, which includes directly attributable transaction costs for financial instruments not classified at fair value through the statement of comprehensive income

Subsequent measurement Subsequent to initial measurement, financial instruments are measured either at fair value or amortised cost,

depending on their classification:

(a) Financial assets held at fair value through profit or loss

A financial asset is classified into the "financial assets at fair value through profit or loss" category at inception if so designated by management at inception.

Financial assets designated as fair value through profit or loss at inception are those that are held in internal funds to match insurance and investment contracts liabilities that are linked to the changes in fair value of these assets. The designation of these assets to be at fair value through profit or loss eliminates or significantly reduces a measurement or recognition inconsistency (sometimes referred to as " an accounting mismatch") that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.

Upon initial recognition, attributable transaction costs are recognised in the statement of comprehensive income as incurred. Subsequent to initial recognition, they are remeasured at fair value, with gains and losses arising from



changes in this value recognized in Net fair value gains/(losses) in the statement of comprehensive income in the period in which they arise. The fair values of quoted investments in active markets are based on current bid prices.

Interest earned and dividends receivable while holding trading assets at fair value through profit or loss are included in investment income.

Financial assets at fair value through profit or loss are presented within "Operating activities" as part of changes in working capital in the statement of cash flows.

(b) Held-to-maturity

Held-to-maturity investments are non-derivative financial assets with fixed determinable payments and fixed maturities that management has both the positive intention and ability to hold to maturity other than:

- those that the Company upon initial recognition designates as at fair value through statement of comprehensive income; - those that the Company designates as available for sale; and - those that meet the definition of loans and receivables.

Held to maturity investments include corporate and government bonds. Interests on held-to- maturity investments are included in the consolidated financial statement and reported as interest income within investment income.

Held-to-maturity financial assets are recognised initially at fair value plus any directly attributable transaction costs and are subsequently carried at amortised cost, using the effective interest method, less any accumulated impairment losses. Any sale or reclassification of a more than insignificant amount of held-to-maturity investments not close to their maturity would result in the reclassification of all held-to-maturity investments as available-for-sale, and prevent the Company from classifying financial assets as held-to-maturity for the current and the following two financial years.

(c) Available-for-saleAvailable for sale financial investments are made up of equities. The Company classifies as available-for-sale those financial assets that are generally not designated as another category of financial assets, and strategic capital investments held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or equity prices.

Available-for-sale financial assets are carried at fair value, with the exception of investments in equity instruments where fair value cannot be reliably determined, which are carried at cost. Fair values are determined in the same manner as for investments designated at fair value through statement of comprehensive income. Unrealised gains and losses arising from changes in the fair value of available-for-sale financial assets are recognised in other comprehensive income while the investment is held, and are subsequently transferred to the statement of comprehensive income upon sale or de-recognition of the investment.

Dividends received on available-for-sale instruments are recognised in the statement of profit or loss when the Company’s right to receive payment of the dividend has been established & the amount can be measured reliably.

(d) Loans and receivables

Loans and receivables include non-derivative financial assets with fixed or determinable payments that are not quoted in an active market, other than those classified by the Company as fair value through statement of comprehensive income or available-for-sale. Loans and receivables consist of cash & cash equivalent, loans & advances, reinsurance& co-insurance receivables, trade receivables and other receivables. These are managed in accordance with a documented policy.

Loans and receivables are measured at amortised cost using the effective interest method, less any accumulated impairment losses. Loans granted at below market rates are fair valued by reference to expected future cash flows and current market interest rates for instruments in a comparable or similar risk class and the difference between the historical cost and fair value is accounted for as employee benefits under staff costs.

- Cash & cash equivalentsCash and cash equivalents include cash in hand and at bank, call deposits and short term highly liquid financial assets with original maturities of three months or less from the acquisition date, which are subject to insignificant risk of changes in their fair value, and are used by the Company in the management of its short-term commitments. Cash and cash equivalents are carried at amortised cost in the statement of financial position.

- Trade receivablesTrade receivables arising from insurance contracts are stated net of allowance made for specific debts considered doubtful of recovery. Trade receivables are reviewed at every reporting period for impairment (See 2.6.1 (f) (iii)) for the accounting policy on impairment of trade receivables).




- Loans & advances Loans & advances includes commercial loans, loans to policy holders, staff loans, annuity loans, mortgage loans and agency loans and are recognised at amortised cost.

- Reinsurance and Co-insurance recoverablesThe company cedes business to reinsurers in the normal course of business for the purpose of limiting its net loss through the transfer of risks. Premium ceded comprise the share of gross written premiums transferred to reinsurers based on agreed arrangements. Reinsurance arrangements does not relieve the Company from its direct obligation to policy holders.

(e) Fair value measurementThe best evidence of the fair value of a financial instrument on initial recognition is the transaction price, i.e. the fair value of the consideration paid or received, unless the fair value is evidenced by comparison with other observable current market transactions in the same instrument, without modification or repackaging, or based on discounted cash flow models and option pricing valuation techniques whose variables include only data from observable markets.

Subsequent to initial recognition, the fair values of financial instruments are based on quoted market prices or dealer price quotations for financial instruments traded in active markets. If the market for a financial asset is not active or the instrument is an unlisted instrument, the fair value is determined by using applicable valuation techniques. These include the use of recent arm’s length transactions, discounted cash flow analyses, pricing models and valuation techniques commonly used by market participants.

Where discounted cash flow analyses are used, estimated cash flows are based on management’s best estimates and the discount rate is a market-related rate at the balance sheet date from a financial asset with similar terms and conditions.

Where pricing models are used, inputs are based on observable market indicators at the balance sheet date and profits or losses are only recognised to the extent that they relate to changes in factors that market participants will consider in setting a price.

(f) Impairment of financial assets

(i) Financial assets carried at amortised cost

The carrying amounts of these assets are reviewed at each reporting date to determine whether there is any objective evidence of impairment. A financial asset is considered to be impaired if objective evidence indicates that one or more events that have occurred since the initial recognition of the asset have had a negative effect on the estimated future cash flows of that asset and can be reliably estimated. Objective evidence that a financial asset or company of assets is impaired includes observable data that comes to the attention of the Company about the following events:

- Significant financial difficulty of the issuer or debtor;- A breach of contract, such as a default or delinquency in payments;- It becoming probable that the issuer or debtor will enter bankruptcy or other financial reorganisation;- The disappearance of an active market for that financial asset because of financial difficulties; or- Observable data indicating that there is a measurable decrease in the estimated future cashflow from a company of

financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the Company.

For financial assets measured at amortised cost, the Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant and individually or collectively for financial assets that are not individually significant. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying value and the present value of the estimated future cash flows discounted at the original effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the statement of comprehensive income. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under contract. The Company may measure impairment on the basis of an instrument’s fair value using an observable market price.

For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis of similar credit risk characteristics. Those characteristics are relevant to the estimation of future cashflows for groups of such assets by being indicative of the issuer’s ability to pay all amounts due under the contractual terms of the debt instrument being evaluated. If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as improved credit rating), the previously recognised impairment loss is reversed by adjusting the allowance account. The amount of the reversal is recognised in the statement of comprehensive income.



(ii) Assets classified as available-for-sale

Available-for-sale financial assets are considered impaired if there is objective evidence of impairment, resulting from one or more loss events that occurred after initial recognition but before the reporting date, that have an impact on the future cash flows of the asset. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is an objective evidence of impairment resulting in the recognition of an impairment loss. In this respect, a decline of 20% or more is regarded as significant, and a period of 12 months or longer is considered to be prolonged. If any such quantitative evidence exists for available-for-sale financial assets, the asset is considered for impairment, taking qualitative evidence into account.

All impairment losses are recognized through statement of comprehensive income. If any loss on the financial asset was previously recognized directly in equity as a reduction in fair value, the cumulative net loss that had been recognized in equity is transferred to the statement of comprehensive income and is recognized as part of the impairment loss. The amount of the loss recognized in the statement of comprehensive income is the difference between the acquisition cost and the current fair value, less any previously recognized impairment loss.

Subsequent decreases in the amount relating to an impairment loss, that can be linked objectively to an event occurring after the impairment loss was recognized in the statement of comprehensive income, is reversed through the statement of comprehensive income. An impairment loss in respect of an equity instrument classified as available-for-sale is not reversed through the statement of comprehensive income but accounted for directly in equity.

(iii) Trade receivables

Trade receivables, are a significant part of loans and receivables, are initially recognised at fair value and subsequently measured at amortised cost less provision for impairment. An allowance for impairment is made when there is an objective evidence (such as the probability of solvency or significant financial difficulties of the debtors) that the Company will not be able to collect all the amount due under the original terms of the invoice. Allowances are made based on an impairment model which considers the loss given default for each customer, probability of default and emergence period which serves as an impairment trigger based on the age of the debt. Impaired debts are derecognised when they are assessed as uncollectible. If in a subsequent period the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying value of the asset does not exceed its amortised cost at the reverse date. Any subsequent reversal of an impairment loss is recognised in the statement of comprehensive income.

In respect of other receivables, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

2.6.2 Financial liabilities

The company classifies its financial liabilities, other than financial guarantees and loan commitments, as measured at amortized cost or fair value through profit and loss

Investment contracts Investment contracts are those contracts that transfer financial risk with no significant insurance risk. Investment contracts with guaranteed and fixed terms are initially measured at fair value less transaction cost that are

incremental and directly attributable to the acquisition or issue of the contract.

The Company re-estimates at each reporting date the expected future cashflows and recalculate the carrying amount of the financial liability by calculating the present value of estimated future cashflows using the financial liability's original effective interest rate. Any adjustment is immediately recoginsed as income or expense in the statement of comprehensive income.

Trade and Other Payables Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the

effective interest method. The fair value of a non-interest bearing liability is its discounted repayment amount. If the due date of the liability is less than one year discounting is omitted.

2.6.3 Offsetting financial instruments

Financial assets and liabilities are set off and the net amount presented in the statement of financial position when, and only when, there is a legally enforceable right to set off the recognized amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.





2.6.4 De-recognition of financial instruments

A financial asset is derecognized when the contractual rights of the Company to the cash flows from the asset expire, or its rights to receive the contractual cash flows on the financial asset in a transaction that transfers substantially all the risks and rewards of ownership of the financial asset are transferred, or when it assumes an obligation to pay those cash flows to one or more recipients, subject to certain criteria.

Any interest in transferred financial assets that is created or retained by the Company is recognized as a separate asset or liability. The Company derecognises a financial liability when its contractual obligations are discharged, cancelled or expired.

2.7 Deferred acquisition costs

Acquisition costs comprise all direct and indirect costs arising from the origination of insurance contracts. Deferred acquisition costs represent a portion of commission which are incurred during a financial year and are deferred

to the extent that they are recoverable out of future revenue margins. It is calculated on a time apportionment basis over the tenor of the policies.

2.8 Investment property

Investment property comprises investment in land or buildings held primarily to earn rentals or capital appreciation or both.

The Company's investment property is initially recognized at cost including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met; and excludes cost of day to day servicing of an investment property. An investment property is subsequently measured at fair value with any change therein recognised in statement of profit or loss. Fair values are determined individually, on a basis appropriate to the purpose for which the property is intended and with regard to recent market transactions for similar properties in the same location.

Fair values are reviewed annually by independent valuer, holding a recognized and relevant professional qualification and with relevant experience in the location and category of investment property being valued.

Subsequent expenditure on investment property is capitalized only if future economic benefit will flow to the Company otherwise they are expensed as incurred.

Investment properties are disclosed separate from the Property and equipment used for the purposes of the business. The Company separately accounts for a dual purpose property as investment property if it occupies only an insignificant

portion. Otherwise, the portion occupied by the Company is treated as property and equipment.

2.9 Statutory deposit

These deposits represent bank balances required by the insurance regulators of the Company to be placed with relevant central banks of Company's operating jurisdictions. These deposits are stated at cost. Interest on statutory deposits is recognized as earned in other receivables and the corresponding amount is recognised in statement of comprehensive income within investment income.

2.10 Intangible assets

(a) Goodwill Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. Subsequent to initial recognition,

goodwill is measured at cost less accumulated impairment losses. Goodwill has an indefinite useful life and it is tested annually for impairment.

Goodwill is allocated to cash-generating units or groups of cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from

the business combination in which the goodwill arose identified in accordance with IFRS 3.

Goodwill has an indefinite useful life and is tested annually as well as whenever a trigger event has been observed for impairment by comparing the present value of the expected future cash flows from a cash generating unit with the carrying value of its net assets, including attributable goodwill and carried at cost less accumulated impairment losses.

Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.


(b) Purchased software Recognition of software acquired is only allowed if it is probable that future economic benefits to this intangible asset are

attributable and will flow to the Company.

Internally developed software is capitalized when the Company has the intention and demonstrates the ability to complete the development and use of the software in a manner that will generate future economic benefits, and can reliably measure the costs to complete the development. The capitalised costs include all costs directly attributable to the development of the software. Internally developed software is stated at capitalised cost less accumulated amortisation and impairment.

Subsequent expenditure on software assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred. Amortisation is recognised in statement of comprehensive income on a straight-line basis over the estimated useful life of the software, from the date that it is available for use. The estimated useful life of software is three years subject to annual reassessment.

2.11 Property and equipment

Recognition & measurement

Property and equipment comprise land and buildings and other properties owned by the Company. Items of Property and equipment are carried at cost less accumulated depreciation and impairment losses except for land

and building which is carried at revalued amount. Cost includes expenditure that is directly attributable to the acquisition of the asset.

Subsequent costs Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when

it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the statement of comprehensive income during the financial period in which they are incurred.

Subsequent costs on replacement parts on an item of property are recognized in the carrying amount of the asset and the carrying amount of the replaced or renewed component is derecognized.

Subsequent measurement

All items of property and equipment except land and buildings are subsequently measured at cost less accumulated depreciation and impairment losses.

Land and buildings

Land and buildings are subsequently carried at revalued amounts, being fair value at the date of revaluation less subsequent accumulated depreciation and impairment losses, if any. They are valued on an open market basis by qualified property valuers at each reporting date. Land is however not depreciated.

When an individual property is revalued, any increase in its carrying amount (as a result of revaluation) is transferred to a revaluation reserve, except to the extent that it reverses a revaluation decrease of the same property previously recognised as an expense in the statement of statement of comprehensive income.

When the value of an individual property is decreased as a result of a revaluation, the decrease is charged against any related credit balance in the revaluation reserve in respect of that property. However, to the extent that it exceeds any surplus, it is recognised as an expense in the statement of statement of comprehensive income.

When Land and buildings are revalued, any accumulated depreciation at the date of the revaluation is eliminated against the gross carrying amount of the asset and the net amount restated to the revalued amount.

Depreciation

Depreciation is calculated on property and equipment excluding land on the straight line basis to write down the cost of each asset to its residual value over its estimated useful life.

Depreciation begins when an asset is available for use and ceases at the earlier of the date that the asset is erecognised or classified as held for sale in accordance with IFRS 5.

The estimated useful lives for the current and comparative periods are as follows:




Land - Not depreciated Buildings - 50 years Office equipment - 5 years Computer equipment - 3 years Furniture and fittings - 5 years Motor vehicles - 4 years

Capital work in progress is not depreciated. The Company's capital work in progress relates to capital expenditure on properties to be for the company's activities. Upon completion it is transferred to the relevant asset category.

Depreciation methods, useful lives and residual values are reassessed at each reporting date.

De-recognition

Upon disposal of any item of property and equipment or when no future economic benefits are expected to flow from its use, such items are derecognized from the books. Gains and losses on disposal of assets are determined by comparing proceeds with their carrying amounts and are recognized in the statement of comprehensive income in the year of de-recognition.

Re-classification to investment property

When the use of a property changes from owner-occupied to investment property, the property is re-measured to fair value and reclassified accordingly.

Any gain arising on this re-measurement is recognised in statement of comprehensive income to the extent that it reverses a previous impairment loss on the specific property with any remaining gain recognised in OCI and presented in revaluation reserve.

Any loss is recognised in statement of comprehensive income. However, to the extent that an amount is included in revaluation surplus for that property, the loss is recognised in OCI and reduces the revaluation surplus in equity.

2.12 Leases

The Company initially adopted IFRS 16 Leases from 1 January 2019. IFRS 16 introduced a single, on-balance sheet accounting model for leases. As a result, the Company, as a lessee has

recognized the right-of-use assets representing its right to use the underlying assets. Lessors accounting remains similar to previous accounting policies.

The major lease transaction wherein the Company is a lessee relates to the lease of Leadway Assurance's operating branches in several locations.

The Company has applied IFRS 16 using the modified retrospective approach. Accordingly, the comparative information presented for 2018 is not restated – i.e it is presented, as previously reported, under IAS 17 and related interpretations.

The details of the changes in accounting policies are disclosed below.

A. Definition of a lease

On transition to IFRS 16, the Company has elected to apply the practical expedient available not to reassess whether a contract is or contains a lease. Accordingly, the definition of a lease in accordance with IAS 17 and IFRIC 4 will continue to apply to those leases entered or modified before 1 January 2019.

Under IFRS 16, a contract is, or contains a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. The change in definition of a lease mainly relates to the concept of control. IFRS 16 distinguishes between leases and service contracts on the basis of whether the use of an identified asset is controlled by the customer. Control is considered to exist if the customer has:

* The right to obtain substantially all of the economic benefits from the use of an identified asset; and * The right to direct the use of that asset.

The Company will apply the definition of a lease and related guidance set out in IFRS 16 to all lease contracts entered into or modified on or after 1 January 2019 (whether it is a lessor or a lessee in the lease contract).

At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease and non-lease component on the basis of their relative stand-alone prices. However, for leases of properties in which it is a lessee, the Company has elected not to separate non-lease components and will instead account for the lease and non-lease component as a single component.

B. As a Lessee

Leases, under which the Company possess a contract that conveys the right to control the use of an identified asset for a period of time in exchange for consideration is disclosed in the Company's statement of financial position and recognized as a leased asset.



To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Company assesses whether, throughout the period of use, it has both of the following:

(a) the right to obtain substantially all of the economic benefits from use of the identified asset, and (b) the right to direct the use of the identified asset. The Company recognizes expenses associated with these leases as an expense on straight line basis over the lease term. The Company presents right-of-use assets as a separate class under ‘property and equipment’. i. Significant accounting policies The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset

is initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses, and adjusted for certain remeasurements of the lease liability.

The lease liability (where applicable) is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

The lease liability (where applicable) is subsequently increased by the interest cost on the lease liability and decreased by lease payment made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised.

The Company has applied judgement to determine the lease term for some lease contracts in which it is a lessee that include renewal options. The assessment of whether the Company is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease liabilities and right-of-use assets recognized.

ii. Transition Previously, the Company classified property leases as operating leases under IAS 17. These properties are Leadway

Assurance's operating branches/welcome centres * At transition, right-of-use assets are measured at an amount equal to the lease liability (where applicable), adjusted by

the amount of any prepaid or accrued lease payments - the Company applied this approach to all other leases.

The Company used the following practical expedients when applying IFRS 16 to leases previously classified as operating leases under IAS 17.

* Applied the exemption not to recognize right-of-use assets and liabilities (where applicable) for leases with less than 12 months of leaseterm.

* Excluded initial direct costs from measuring the right-of-use asset at the date of initial application. * Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease.

C. As a lessor The company leases out it's investment property, including own property and right-of-use assets. The company has

classified these leases as operating leases. The company is not required to make any adjustments on transition to IFRS 16 for leases in which it acts as a lessor, except for a sub-lease.

D. Transition impact on financial statements On transition to IFRS 16, the Company recognized additional right-of-use assets as summarized below:

In millions of Naira 1 January 2019

Operating lease presented as part of prepayments as at 31 December 2018. 88.15 Recognition exemption for leases of low-value - Recognition exemption for short term leases -

Right-of-use asset recognized as at 1 January 2019 88.15 As a result of initially applying IFRS 16, in relation to the leases that were previously classified as operating leases, the

Company recognized N88.15 million of right-of-use assets. Also, in relation to those leases under IFRS 16, the Company has recognized depreciation instead of operating lease

expense. During the year, the Company recognizes N56.78 million of depreciation charges.




Most general insurance contract policies

Short Term Long Term

Life Contracts Group life insurance contract policies

Some insurance contracts under special risks

Insurance contract policies over human life

(i) General insurance contract

These contracts are accident, casualty and property insurance contracts.

Accident and casualty insurance contracts protect the Company's customers against the risk of causing harm to third parties as a result of their legitimate activities. Damages covered include both contractual and non-contractual events. The typical protection offered is designed for employers who become legally liable to pay compensation to injured employees (employers' liability) and for individual and business customers who become liable to pay compensation to a third party for bodily harm or property damage (public liability).

Property insurance contracts mainly compensate the Company's customers for damage suffered to their properties or for the value of property lost. Customers who undertake commercial activities on their premises could also receive compensation for the loss of earnings caused by the inability to use the insured properties in their business activities.

general insurance contracts protects the Company's customers from the consequences of events (such as death or disability) that would affect the ability of the customer or his/her dependants to maintain their current level of income. Guaranteed benefits paid on occurrence of the specified insurance event are either fixed or linked to the extent of the economic loss suffered by the insured. There are no maturity or surrender benefits.

(ii) Life insurance contract

These contracts insure events associated with human life (for example, death or survival) over a long duration. -Indivdual and group life insurance contracts Individual life contracts are usually long term insurance contracts and span over one year while the company life insurance


General Insurance contracts

2.13 Classification of insurance contracts The Company enters into insurance contracts as its primary business activities. Insurance contracts are those that the

Company accepts significant insurance risk from another party (the policy holder) by agreeing to compensate the policy holder or other beneficiary, if a specified uncertain future event (the insured event) adversely affects the policy holder or the other beneficiary. The Company as a guide defines significant insurance risk as the possibility of having to pay benefit on the occurrence of an insured event that are at least 10% more than the benefit payable if the insured event did not occur.

The Company classifies financial guarantee contracts and account for these as insurance contracts in accordance with IFRS 4.

(a) Types of insurance contractsThe Company classifies insurance contracts into life and general insurance contracts. The company also makes a distinction between Short and Long term insurance contracts as follows:




contracts usually cover risk within one year. A liability for contractual benefits that are expected to be incurred in the future when the premiums are recognised. The liability is determined as the sum of the expected discounted value of the benefit payments and the future administration expenses that are directly related to the contract, less the expected discounted value of the theoretical premiums that would be required to meet the benefits and administration expenses based on the valuation assumptions used. The liability is based on assumptions as to mortality, persistency, maintenance expenses and investment income that are established at the time the contract is issued.

-Annuity contracts These contracts insure customers from consequences of events that would affect the ability of the customers to maintain

their current level of income. There are no maturity or surrender benefits. The annuity contracts are fixed annuity plans. Policy holders make a lump sum payment recognised as part of premium in the period when the payment was made. Constant and regular payments are made to annuitants based on terms and conditions agreed at the inception of the contract and throughout the life of the annuitants. The annuity funds are invested in long tailed government bonds and reasonable money markets instruments to meet up with the payment of monthly/quarterly annuity payments. The annuity funds liability is actuarially determined based on assumptions as to mortality, persistency, maintenance expenses and investment income that are established at the time the contract is issued.

(b) Insurance contracts- Recognition and measurement

(I) Premiums

Gross premiums comprise the premiums on insurance contracts entered into during the year, irrespective of whether they relate in whole or in part to a later accounting period. This is recognised gross of commission expense.

Premiums on reinsurance inward are included in gross written premiums and accounted for as if the reinsurance was considered direct business, taking into account the product classification of the reinsured business.

Outward reinsurance premiums are accounted for in the same accounting period as the premiums for the related direct insurance or reinsurance business assumed.

The earned portion of premiums received is recognized as revenue. Premiums are earned from the date of attachment of risk, over the insurance period, based on the pattern of risk underwritten. Outward reinsurance premiums are recognized as an expense in accordance with the pattern of risk reinsured.

(ii) Unearned premiums

Unearned premiums are those proportions of premiums written in the year for general insurance contracts that relate to periods of risks after the reporting date. It is computed separately for each general insurance contract using a time apportionment basis, or another suitable basis for uneven risk contracts. Provision for unexpired risk is made for unexpired risks arising where the expected value of claims and expenses attributable to the unexpired period of policies in force at the reporting date exceeds the unearned premium in relation to such policies after deduction of any deferred acquisition costs.

(iii) Reinsurance

The Company cedes out insurance risks in the normal course of business for the purpose of limiting its net loss on policies written. Premium ceded comprise written premiums ceded to reinsurers, adjusted for the reinsurers’ share of the movement in the provision for the unearned premiums. Reinsurance arrangements do not relieve the Company from its direct obligations to its policy holders.

Premium ceded, claims reimbursed and commission recovered are presented in the statement of comprehensive income and statement of financial position separately from the gross amounts.

Reinsurance assets represent balances due from reinsurance contracts. Reinsurance liabilities are primarily premiums payable for reinsurance contracts and are recognised at cost.

Reinsurance recoverables are estimated in manner consistent with the outstanding claims provision and claims incurred associated with the reinsurer’s polices and are in accordance with the related insurance contract. They are measured at their carrying amount less any impairment charges. Amounts recoverable under reinsurance contracts are assessed for impairment at each Statement of financial position date. If there is objective evidence of impairment, the Company reduces the carrying amount of its reinsurance assets to its recoverable amount and recognizes the impairment loss in the statement of comprehensive income as a result of an event that occurred after its initial recognition, for which the Company may not be able to recover all amounts due and the event has a reliably measurable impact on the amounts that the Company will receive from the reinsurer.


(iv) Commission income

Commissions are recognized on ceding business to the reassurer, and are credited to the statement of comprehensive income.

(v) Underwriting expenses

Underwriting expenses are made up of acquisition and maintenance expenses.

Underwriting expenses for insurance contracts and investment contracts are recognized as expense when incurred, with the exception of acquisition costs which are recognized on a time apportionment basis in respect of risk.

(vi) Claims incurred

Claims incurred consist of claims and claims handling expenses paid during the financial year together with the movement in the provision for outstanding claims. The provision for outstanding claims represent the Company’s estimate of the ultimate cost of settling all claims incurred but unpaid at the balance sheet date whether reported or not. The provision includes an allowance for claims management and handling expenses.

The provision for outstanding claims for reported claims, is estimated based on current information and the ultimate liability may vary as a result of subsequent information and events and may result in significant adjustments to the amounts provided. Adjustments to the amounts of claims provision for prior years are reflected in the statement of comprehensive income in the financial period in which adjustments are made, and disclosed separately if material.

Reinsurance recoverables are recognized when the Company records the liability for the claims and are not netted off claims expense but are presented separately in the statement of comprehensive income.

Claims incurred in respect of long-term insurance contracts especially pure life business and annuity contracts consist of claims arising during the year including provision for policy holders’ liabilities. Outstanding claims on long-term insurance contracts that have occurred at the balance sheet date and have been notified by the insured are carried at the claim amounts advised.

(viii) Salvages

Some general insurance contracts permit the Company to sell (usually damaged) property acquired in the process of settling a claim. The Company may also have the right to pursue third parties for payment of some or all costs of damages to its client's property (i.e. subrogation right). Salvage recoveries are presented net of the claim expense.

2.14 Insurance contract liabilities

The recognition and measurement of Insurance contract liabilities is determined as follows:

(i) General Insurance business

(a) Reserves for unearned premium and unexpired risk

The reserve for unearned premium is calculated on a time apportionment basis in respect of risk accepted during the year with the exception of construction all risk policies where the risk increases with term and progress on the project at hand and marine policies where actuarial valuation is used to determine the liabilities. A provision for additional unexpired risk reserve is recognised for an underwriting year where it is determined that the estimated cost of claims and expenses would exceed the unearned premium reserve.

(b) Reserves for outstanding claims

The reserve for outstanding claims is maintained at the total amount of outstanding claims incurred plus claims incurred but not reported ("IBNR") as at the reporting date. The IBNR is based on the liability adequacy test.



(c) Liabilities Adequacy Test

The net liability for insurance contracts is tested annually for adequacy by actuarial valuation. This is carried out by discounting current estimates of all future contractual cash flows and comparing this amount to the carrying value of the liability net of deferred acquisition costs.

Where a shortfall is identified, an additional provision is made and the Company recognizes the deficiency in the statement of comprehensive income for the year. The method of valuation and assumptions used, the cashflows considered and the discounting and aggregation practices adopted have been set out in the following notes.

Reserving methodology and assumptions

For general insurance risks, the Company uses different methods to incorporate the various assumptions made in order to estimate the ultimate cost of claims. The two methods more commonly used are the Discounted Inflation-adjusted Basic Chain Ladder and the Expected Loss Ratio methods adjusted for assumed experience to date.

Claims data was grouped into triangles by accident year or quarter and payment year or quarter. The choice between quarters or years was based on the volume of data in each segment. Analysis was conducted by line of business.

Discounted inflation-adjusted basic chain ladder method

Historical claims paid were grouped into cohorts – representing when they were paid after their underwriting year. These cohorts are called claim development years and the patterns were studied. The historical paid losses are projected to their ultimate values for each underwriting year by calculating the loss development factors for each development year. The ultimate claims are then derived using the loss development factors and the latest paid historical claims.

The historical paid losses are inflated using the corresponding inflation index in each of the accident years to the year of

valuation and then accumulated to their ultimate values for each accident year to obtain the projected outstanding claims. These projected outstanding claims are then further multiplied by the future inflation index from the year of valuation to the future year of payment of the outstanding claims.

The resulting claims estimated is discounted to the valuation date using a discount factor raised by years as a result of applying historical inflation rates to determine the appropriate discount rate to allow for a margin of prudence.

The future claims (the ultimate claim amount less paid claims to date) are allocated to future payment periods in line with the development patterns. The outstanding claims reported and that paid to date are then subtracted from the total future claims to give the resulting IBNR figure per accident year or quarter. i.e. IBNR = (Ultimate claim amount) minus (paid claims till date) minus (claims outstanding).

Assumptions underlying the Discounted Inflation-adjusted Basic Chain Ladder method

This method assumes the following: - The future claims follows a trend pattern from the historical data. - Payment patterns will be broadly similar in each accident year. Thus, the proportionate increases in the known

cumulative payments from one development year to the next is used to calculate the expected cumulative payments for the future development periods.

- The run off period is six (6) years and hence the method assumes no more claims will be paid subsequently.

Expected loss ratio method

This method was adopted where the volume of data available is too small to be credible when using a statistical approach. Special risk reserves were estimated based on this method. Under this method, the ultimate claims was obtained by assuming loss ratio of 50%, where loss ratio is defined as claims incurred divided by earned premiums.

Outstanding claims is stated as amount estimated less paid claims.

(ii) Life business These contracts insure events associated with human life (for example, death or survival) over a long duration. Premiums are

recognised as revenue when they become payable by the contract holder. Premiums are shown before deduction of commission.

Benefits are recorded as an expense when they are incurred.





A liability for contractual benefits that are expected to be incurred in the future is recorded when the premiums are recognised. The liability is determined as the sum of the expected discounted value of the benefit payments and the future administration expenses that are directly related to the contract, less the expected discounted value of the theoretical premiums that would be required to meet the benefits and administration expenses based on the valuation assumptions used (the valuation premiums). The liability is based on assumptions as to mortality, persistency, maintenance expenses and investment income that are established at the time the contract is issued. A margin for adverse deviations is included in the assumptions.

Where insurance contracts have a single premium or a limited number of premium payments due over a significantly shorter period than the period during which benefits are provided, the excess of the premiums payable over the valuation premiums is deferred and recognised as income in line with the unexpired insurance risk of the contracts in force or, for annuities in force, in line with the amount of future benefits expected to be paid.

The liabilities are recalculated at each balance sheet date using the assumptions established at inception of the contracts.

Actuarial valuation of the life fund is conducted annually to determine the net liabilities on the existing policies and the adequacy of the assets representing the insurance funds as at the date of the valuation. All deficits arising therefore are charged to the statement of comprehensive income while the surplus is appropriated to the shareholders and credited to the statement of comprehensive income.

2.15 Provisions

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Provisions are determined by discounting the expected future cash flows discounted at a rate that reflects current market assessments of the time value of money and the risks specific to the obligation.

2.16 Employee benefits

Short-term benefits

Short-term employee benefit obligations include wages, salaries and other benefits which the Company has a present obligation to pay, as a result of employees’ services provided up to the balance sheet date. The accrual is calculated on an undiscounted basis, using current salary rates.

A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Post employment benefits

The Company operates a defined contributory retirement scheme as stipulated in the Pension Reform Act 2004. Under the defined contribution scheme, the Company pays fixed contributions of 10% to a separate entity – Pension Fund Administrators; employees also pay 8% to the same entity. Once the contributions have been paid, the Company retains no legal or constructive obligation to pay further contributions if the Fund does not hold enough assets to finance benefits accruing under the retirement benefit plan. The Company’s obligations are recognised in the statement of comprehensive income.

The Company introduced a defined contributory post employment benefit scheme during the year for its Executive Directors. Under the scheme, the Company contributes fixed amounts as determined by the Board of Directors to their respective Pension Fund Administrators. The contribution made in the year and for past service has been charged

to profit or loss.

Termination benefits

Termination benefits are payable whenever an employee’s employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Company recognizes termination benefits when it is demonstrably committed either to terminate the employment of current employees according to a detailed formal plan without possibility of withdrawal, or to provide termination benefits as a result of an offer made to encourage voluntarily redundancy if it is probable that the offer will be accepted and the number of acceptances can be estimated. Benefits falling due more than 12 months after balance sheet date are discounted to present value.




2.17 Income tax

(i) Current tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year, and any adjustment to

tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date and is assessed as follows:

- Company income tax is computed on taxable profits - Tertiary education tax is computed on assessable profits - National Information Technology Development Agency levy is computed on profit before tax - Nigeria Police Trust Fund levy is computed on net profit (i.e. profit after deducting all expenses and taxes from revenue earned

by the company during the year).

Total amount of tax payable under CITA is determined based on the higher of two components namely Company Income Tax (based on taxable income (or loss) for the year); and minimum tax. Taxes based on profit for the period are treated as income tax in line with IAS 12.

Minimum tax Minimum tax which is based on a gross amount is outside the scope of IAS 12 and therefore, are not presented as part of

income tax expense in the profit or loss. The Company is subject to the Finance Act (amendments made to Companies Income Tax Act (CITA)). Total amount of tax payable under the new Finance Act shall not be less than 0.5% of the Company's gross premium for general business and 0.5% of gross income for life business.

Where the minimum tax charge is higher than the Company Income Tax (CIT), a hybrid tax situation exists. In this situation, the

CIT is recognized in the income tax expense line in the profit or loss and the excess amount is presented above the income tax line as Minimum tax.

(ii) Deferred taxation Deferred taxation, which arises from timing differences in the recognition of items for accounting and tax purposes, is

calculated using the liability method. Deferred taxation is provided fully on timing differences, which are expected to reverse at the rate of tax likely to be in force at the time of reversal. A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the associated unused tax losses and deductible temporary differences can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, differences relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future and differences arising from investment property measured at fair value whose carrying amount will be recovered through use. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised.

2.18 Share capital and reserves

Share capital The Company classifies ordinary shares and share premium as equity when there is no obligation to transfer cash or other

assets. Incremental costs directly attributable to issue of shares are recognised as deductions from equity net of any tax effects.

Dividend on ordinary shares Dividend distribution to the Company’s shareholders is recognised as a liability in the financial statements in the period in

which the dividends are approved by the Company’s shareholders. Dividends that are proposed but not yet declared are disclosed in the notes to the financial statements. Dividends on the Company’s ordinary shares are recognised in equity in the period in which they are paid or, if earlier, approved by the Company’s shareholders.

(a) Contingency reserves

The Company maintains contingency reserves in accordance with the provisions of the Insurance Act 2003 to cover fluctuations in securities and variations in statistical estimates at the rate equal to the higher of 3% of total premium or 20% of


the total profit after taxation until the reserve reaches the greater of minimum paid up capital or 50% of net premium for general insurance business. Contingency reserve for life business is credited with the higher of 1% of gross premium and 10% of profit after taxation. The insurance subsidiary in Cote d'Ivoire (Leadway Vie) maintains a Legal reserve in accordance with the provisions of Article 346 of the OHADA Treaty on Commercial Companies and Economic Interest Groupings, a company is expected to set aside 10% of its profit after tax, after payment of dividends minus carried forward losses as legal reserve. This ceases to be mandatory when the amount so set aside reaches 20% of its stated capital.

(b) Assets revaluation reserves

Assets revaluation reserves represents the fair value differences on the revaluation of items of Property and equipment as at the balance sheet date.

(c) Fair value reserves Fair value reserves represents the fair value gains or losses on valuation of financial assets measured at fair value through

equity.

(d) Treasury shares

When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognised as deduction from equity. Repurchased shares are classified as treasury shares and are presented in the treasury shares reserve. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity and the resulting surplus or deifcit on the transaction is presented within share premium.

2.19 Earnings per share

The Company presents basic earnings per share for its ordinary shares. Basic earnings per share are calculated by dividing the profit attributable to ordinary shareholders of the company by the number of shares outstanding during the year.

Diluted Earnings per share is determined by dividing the statement of comprehensive income attributable to ordinary

shareholders by the weighted average number of ordinary shares adjusted for the bonus shares issued.

2.20 Revenue recognition

Revenue comprises the fair value for services, net of value-added tax, after eliminating revenue within the Company. Revenue is recognised as follows:

(i) Insurance contracts:

See accounting policy 2.13 b(i) for recognition of premium on insurance contracts.

(ii) Investment and other operating income

Investment income comprises interest income earned on short-term deposits, rental income and income earned on trading of securities including all realised and unrealised fair value changes, interest income on loans and finance leases, dividends and foreign exchange differences. Investment income is accounted for on an accrual basis.

Other operating income comprises of fee income and profit on disposal of property and equipment.

(iii) Dividend income

Dividend income for available for sale equities are recognised when the right to receive payment is established.

(iii) Rendering of Services

Revenue arising from asset management and other related services offered by the Company are recognised in the accounting period in which the services are rendered.

Fee income consist primarily of investment management fees and pension administration fees. These fees are recognised in the period in which the services are rendered.

2.21 Management expense

Management expenses are expenses other than claims and underwriting expenses. They include depreciation expenses and other operating expenses. They are recognised on an accrual basis.





2.22 Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired.

2.23 Impairment of non-financial assets The Company’s non-financial assets with carrying amounts other than investment property are reviewed at each reporting

date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. For intangible assets that have indefinite useful lives or that are available for use, the recoverable amount is estimated each year at the same time.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in statement of comprehensive income.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.


Financial Statements


67 | Company Statement of Financial Position

68 | Company Statement of Comprehensive Income

69 | Company Statement of Changes in Equity

71 | Company Statement of Cash Flows

72 | Notes to the Financial Statements

ASSETS

Cash and cash equivalentsTrade receivablesInvestment securities- Financial assets at fair value through profit or loss - Available for sale financial assetsReinsurance assetsDeferred acquisition costOther receivables and prepaymentsLoans and advancesProperty and equipmentInvestment propertiesInvestment in subsidiariesIntangible assetsStatutory deposits

TOTAL ASSETS

LIABILITIES

Trade payablesCurrent income tax liabilitiesOther liabilitiesInsurance contract liabilitiesInvestment contract liabilitiesDeferred tax liabilities

TOTAL LIABILITIES

EQUITY

Issued and paid up share capitalShare premiumRetained earningsOther reserves

TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY

Non controlling interest

TOTAL EQUITY

TOTAL EQUITY AND LIABILITIES

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS ON 5 March 2020 BY:

____________________________________ ______________________________________ ______________________________________Mr. Tunde Hassan Odukale General (Rtd) Martin Luther Agwai Mr. Raphael AkomoledeFRC/2013/IODN/00000002040 FRC/2019/CDIR/00000019923 FRC/2013/ICAN/00000001912Chief Executive Officer Chairman Ag. Chief Financial Officer

The notes are an integral part of these consolidated financial statements.

(All amounts in thousands of Nigerian Naira unless otherwise stated)

Company Statement of Financial Position

As at 31 December 2019

Company31-Dec-19

26,210,607102,459

238,425,82762,200,27839,038,453

825,3672,132,5611,402,7954,412,066

17,199,0242,153,425

162,448500,000

394,765,310

9,690,123859,502

4,539,823296,704,133

26,796,2121,883,284

340,473,077

10,000,000588,575

24,297,45819,406,200

54,292,233

-

54,292,233

394,765,310

Company31-Dec-18

32,978,304395,585

156,009,761

53,279,95943,688,887

851,0691,417,6021,395,5643,428,095

16,414,4432,153,425

255,339500,000

312,768,033

11,573,8041,083,9485,627,973

225,437,15721,890,990

1,883,284

267,497,156

10,000,000588,575

18,361,62116,320,681

45,270,877

-

45,270,877

312,768,033

Notes

678

8.18.2

91011121314151718

192021222316

24242424

25


Company Statement of Comprehensive IncomeFor the year ended 31 December 2019(All amounts in thousands of Nigerian Naira unless otherwise stated)

Gross premium written

Gross premium incomeReinsurance expensesNet premium income

Commission incomeUnderwriting income

Claims expensesIncrease in annuity fundIncrease in individual life fundUnderwriting expensesTotal underwriting expense

Total underwriting (loss)/profit

Investment income(Loss)/profit on investment contractsNet fair value gain/(loss) on assets at fair valueOther operating incomeGain on assets distributedEmployee benefit expensesOther operating expenses

Net impairment (losses)/ write backProfit before income tax

Income tax expenseProfit for the year from continuing operations

Loss for the year from discontinued operations

Profit for the year

Other comprehensive income:Items that may be subsequently reclassified to the profit or loss account: Changes in available-for-sale financial assets net of taxes Net amount transferred to the income or (loss) statement on sale of Available for sale Debt instrumentItems within OCI that will not be reclassified to profit or loss: Gain on revaluation of properties and equipment net of tax

Other comprehensive income for the year

Total comprehensive income for the year

Profit attributable to:- Owners of the Company- Non-controlling interest (Loss)

Profit for the year

Total Comprehensive income attributable to:- Owners of the Company- Non-controlling interest (Loss)


Total Comprehensive income attributable to equityshareholders arises from:- Continuing operations

Total comprehensive income for the yearBasic/Diluted - Earnings per share (kobo): - From continuing operations- From Discontinued operations- Total Comprehensive Income for the Year

Company31-Dec-19

90,596,192

88,854,306(17,956,199)

70,898,107

2,888,17973,786,286

(38,474,501)(73,125,802)

(993,480)(8,128,704)

(120,722,487)

(46,936,201)

31,853,455602,697

33,858,052705,604

-(3,196,138)(5,595,554)11,291,915

(5,450)11,286,465

(434,750)10,851,715

-

10,851,715

832,396

275,836

61,409

1,169,641

12,021,356

10,851,715-

10,851,715

12,021,356-

12,021,356

12,021,356

12,021,356

109-

109

Company31-Dec-18

87,519,720

87,737,230(16,615,355)

71,121,875

1,879,67173,001,546

(33,891,693)(30,020,421)

(120,183)(6,159,494)

(70,191,791)

2,809,755

22,805,449239,712

(11,809,671)4,262,9042,931,805

(3,845,148)(6,004,804)11,390,001

22,78111,412,782

(2,229,461)9,183,321

-

9,183,321

(2,855,554)

110,070

91,776

(2,653,708)

6,529,613

9,183,321-

9,183,321

6,529,613-

6,529,613

6,529,613

6,529,613

59-

59

Notes

26

2627

28

29

30

3131(a)

3233

53435

36

37

5

383838



2019

As at 1 January 2019Profit for the yearOther comprehensive income

Net changes in fair value of AFS financial instrumentsNet amount transferred to Income statementFair value on disposal of property and equipment

Fair value gain on property and equipment net of tax


Transaction with owners & directly in equity:

Transfer to contingency reserveContingent consideration on investment in parentContributions of equity net of transaction costsCash dividend paid to equity holders

Total transactions with owners of equity


Share capital

10,000,000-

-

-

-

-

-

-

-

10,000,000

ATTRIBUTABLE TO OWNERS OF THE PARENT

Retained earnings

18,361,62110,851,715

-

-

10,851,715

(1,915,879)-

(3,000,000)

(4,915,879)

24,297,457

Fair valuereserve on

Available forsale financial

assets

3,090,660-

832,396275,836

-

1,108,232

--

-

4,198,892

Contingency reserve

11,732,730-

--

-

-

1,915,879-

-

1,915,879

13,648,609

Asset revaluation

reserve

1,497,291-

-

-

61,409

61,409

--

-

-

1,558,700

Total

45,270,87710,851,715

832,396275,836

-

61,409

12,021,356

---

(3,000,000)

(3,000,000)

54,292,233

share premium

588,575-

-

-

-

-

-

-

-

588,575

Company Statement of Changes in Equity

For the year ended 31 December 2019(All amounts in thousands of Nigerian Naira unless otherwise stated)

69

Company 2018

As at 1 January 2018Profit for the yearOther comprehensive income

Net changes in fair value of AFS financial instruments Net amount transferred to Income statementFair value transferred on disposal of property an equipment

Fair value gain on property and equipment net of tax


Transaction with owners & directly in equity:

Transfer to contingency reserveContingent consideration on investment in parentCash dividend paid to equity holdersIssue of Bonus Shares Distribution of Non - Insurance Subsidiaries

Fair value remeasurement of non - insurance subsidiaries

Total transactions with owners of equity


Share capital

4,682,450-

-

-

-

-

-

-

5,317,550

5,317,550

10,000,000

ATTRIBUTABLE TO OWNERS OF THE PARENT

Retained earnings

20,795,4989,183,321

-

30,000

-

10,851,715

(1,855,522)

(1,750,000)

(1,472,377)(3,637,494)

(2,931,805)

(11,647,198)

18,361,621

Fair valuereserve on

Available forsale financial

assets

5,836,144-

(2,855,554)110,070

-

(2,745,484)

-

-

-

3,090,660

Contingency reserve

9,877,208-

-

-

-

-

1,855,522-

1,855,522

11,732,730

Asset revaluation

reserve

1,435,515-

-

(30,000)

91,776

61,409

--

-

1,497,291

Total

47,060,563 9,183,321

(2,855,554) 110,070

-

91,776

6,529,613

-

(1,750,000) -

(3,637,494)

(2,931,805)

(8,319,299)

45,270,877

share premium

4,433,748-

-

-

-

-

-

-

(3,845,173)

(3,845,173)

588,575

Separate Statement of Changes in EquityFor the year ended 31 December 2019(All amounts in thousands of Nigerian Naira unless otherwise stated)

70ANNUAL REPORT

& ACCOUNTS 2019

Company31-Dec-19

82,530,537(18,022,240)

2,888,179(41,956,098)

9,856,703(6,747,694)

2,895,711(2,933,299)

6,102,664(2,455,320)(4,157,432)(8,032,207)

19,969,505

(659,196)

19,310,309

28,588,662(576,704)1,322,094 1,317,394

13,376 (92,148,721) (43,766,851)

- (508,760)

(60,708) (1,390,236) 83,556,638

616,160 - --- -

(23,037,654)

(3,000,000)

(3,000,000)

(6,727,345) (40,352)

32,978,304

26,210,607

Operating activities

Insurance premium receivedReinsurance premium paidReinsurance commission receivedInsurance benefits and claims paidDeposit received on investment contractsClaims paid on investment contractsReinsurance claims receivedCommission paidPremium received in advanceCash paid to insurance brokers and reinsurersCash paid to employeesCash paid to external parties

Corporate tax paid

Net cash used in operating activities

Cash flows from investing activities

Investment income receivedPurchase of investment propertyDividend receivedOther income receivedProceeds on disposal of property and equipmentPurchase of Financial assets designated at fair valuePurchase of available for sale financial assetPurchase of Held to Maturity Investment SecuritiesPayment for Loans and ReceivablesPurchase of intangible assetsPurchase of property and equipmentProceeds on disposal of Investment securitiesLoans repayment receivedRefund of deposit for shares to subsidiaryCash on acquisitionCash from subsidiaries distributed

Proceeds on disposal of investment property

Net cash used in investing activities

Cash flows from financing activities

Dividend paid to equity holders (parents)

Net cash used in financing activities

Net increase in cash and cash equivalentsEffect of exchange rate fluctuations on cash heldCash and cash equivalents at beginning of year

Cash and cash equivalent at end of year

Notes

2728302323

20

14

8.18.2

1713

6

6

Company31-Dec-18

77,964,613 (16,018,811)

1,879,671 (47,092,940)

7,954,712 (10,808,192)

15,533,139 (4,073,354)

7,349,516 (1,783,496) (3,025,832) (5,297,432)

22,581,594

(788,745)

21,792,849

23,367,307 (430,509)

724,382 3,118,789

132,319 (53,566,530) (11,649,449) (22,981,328)

(853,120) (27,008)

(415,691) 44,198,619

370,072 246,422

-

(17,765,725)

(1,750,000)

(1,750,000)

2,277,124 1,706,164

28,995,016

32,978,304

Company Statement of Cash Flows

As at 31 December 2019(All amounts in thousands of Nigerian Naira unless otherwise stated)


3 Introduction

Leadway Assurance Company Limited (Leadway) applies an entity-wide approach to its risk management process such that both existing and anticipated risks are identified upfront and appropriate responses are applied to reduce the likelihood of the risk downside while exploiting the opportunities inherent in the risks, thus creating value. The ERM framework has assisted all levels of operation in achieving the company’s strategic objectives through systematic and portfolio approach to evaluating and improving on effectiveness of risk management and control.

PurposeThe general purpose of Leadway’s ERM Framework is to provide the internal stakeholders with the guidance that ensures that all decisions made and activities conducted with regard to risk management are in congruence with the entity's goals and business units' objectives.

The specific benefits we envisage gaining from our ERM framework are to:-Protect and strengthen the company’s capital base such that risk acceptances are guided by our Risk Appetite Framework and exposures are curtailed within tolerance limits.-Give reasonable assurance to our policyholders and the regulators about our ability to pay promptly, claims arising now and in the future.-Communicate the risks being taken by the company to the investors and ensure that the objectives of the organization are aligned with the expectations of capital providers.-Reduce Leadway’s susceptibility to systemic risks generated by other sectors in the financial system.Make our capital requirements more risk-sensitive and to improve the alignment of our company’s capital standards.-Provide the means to promote and demonstrate best practices in governance and risk management, and deliver more efficient use of capital.

Enterprise Risk Management Culture and Philosophy-Our risk management philosophy and culture represent our shared values, attitude and practice of how we consider risk in our day-to-day operations across all levels. As insurers, we anticipate risks and in advance, respond appropriately.-We regard every one of our employees as a risk manager and we all take individual and collective ownership of the ERM responsibilities.-We observe prudence in underwriting and limit risks to our appetite and set tolerances beyond which we object to unguided exposures.-We weigh the risk and reward inherent in our daily transactions and pursue those that support value creation to all customers and shareholders.-We have no tolerance for infractions of laws and regulations and we detest business relationship with disreputable business entities and individuals.-We have recorded visible improvement in our risk management strategy that has helped us sustain our leadership position in the Nigerian insurance market and surpass stakeholders’ expectations.-Leadway will continue to pursue value-based risk management objective that strives for an optimal trade- off between risk and reward.

Risk Management StrategyOur risk management methodology recognises that there cannot be total elimination of risk but

ENTERPRISE RISK MANAGEMENT (ERM) STATEMENT

Notes to the Company Financial Statements

(All amounts in thousands of Nigerian Naira)


Notes to the Company Financial Statements Continued


we are determined to reduce both the severity and probability of the occurrence of risk events through appropriate responses. We have deployed an ERM policy that focuses on taking enterprise-level view of interrelationship among various risks with a view to providing an effective responses to managing the material risks that present the greatest threats to our existence and operations as an insurance and investment company. In so doing we will, in the long run, manage risks that are less significant.

We adopt the following strategies in managing risks in Leadway:-i) Incorporate risk management principles into all functions and ensure an environment in which the Board and senior management set the tone for effective controls.-ii) Establish well defined risk management process for risk identification, assessment, controlling, monitoring and reporting.-iii) Entrench a structured and disciplined approach to assets balancing that will prevent concentration of risk in any sector, industry, instrument, product or entity.-iv) Formulation of policies and procedures that ensure that appropriate risk responses, as well as other entity directives, internal policies and control procedures are carried out.-v) Ensure good corporate governance and pursue zero tolerance for non-compliance with regulatory compliance.

External PerspectivesLeadway has continued to be at the forefront of many industry initiatives that seek to ensure setting and adhering to global best practice. This informed its involvement at the trade, association and regulatory levels in setting the tone for compliance with legislations, regulations, guidelines and standards designed for global ratings among insurers. We are conversant with the regulatory direction and we (re)position our business to proactively respond to both local and global insurance standards and regulations.

Risk Governance, Roles & ResponsibilitiesOur risk governance focuses on directing and controlling the management of risks within the company by spelling out the roles and responsibilities for the board, management and employees. The policy adopts the three-lines-of-defence model of risk management governance that revolves around the Board, Risk Management Committee and the Audit Committee.

Risk Management StrategyOur risk management methodology recognises that there cannot be total elimination of risk but we are determined to reduce both the severity and probability of the occurrence of risk events through appropriate responses.

Roles and Responsibilities

The BoardThe board has the ultimate accountability for the risk and the related control environment and as such, is responsible for the following:-To approve the risk management framework, set the risk appetite/tolerance level and the risk management strategy escalated to it, from time to time.-To appraise the risk management process and the internal controls for effectiveness, appropriateness and adequacy.-To ensure that the company’s ERM Framework is subject to periodic audit by competent personnel independent of the company’s risk management functions.


Board Risk & Technical committee-To review risk management framework and policies and present same for board’s approval.-Ensure that the ERM framework takes a portfolio view of risk and that strategy and objectives formulation are predicated on sound understanding and assessment of major risks.-To challenge risk information and examine the appropriateness of the judgments underlying the setting of the company’s risk tolerance/limits.

Risk Management Committee-To establish an appropriate structure that recognises the required level of independence between the risk management officers and those engaged in the normal insurance operations.-Put in place, a well-resourced risk management department with clearly defined responsibilities and authorities for the company’s risk management activities.-Develop risk management initiatives and regularly review the company’s methodology for risk identification, assessment, measurement, mitigation and report escalation.-Design and document risk policies and procedures that reflect changes in entity-risk portfolio and ensure their enterprise-wide implementation.

Business UnitsMany of the operational risks reside in the business units and risk owners/champions in these units have responsibilities for risk management in the respective risks. Specifically, business units are responsible for the following:-To carry out a monthly review of risks profile in the department/unit in compliance with the entity’s risk policies and procedures.-Apply appropriate control measures to manage identified risks and solicit the involvement of the Enterprise Risk Management Division in the escalation of material risks to Risk Management Committee.-Be involved in all activities designed to propagate risk management culture within the company and in building firewalls against emerging exposures that may affect the achievement of the company’s objectives.-Produce risk management reports input for consolidation into the overall report repository domiciled in the Enterprise Risk Management Division.-Provide information towards the development of new approaches to risk management in its domain and collaborate with Enterprise Risk Management Division to prepare appropriate risk mitigation plans for the unit.

Enterprise Risk Management Division-Responsible for facilitation and co-ordination of risk management activities across the company.-Provision of technical assistance and guidance to business units. It will be responsible for raising awareness of risk management across the company.-Reviews and analyses the company’s business and investment proposals to ensure that risks have been adequately identified and proper mitigating factors put in place.-Develop Key Risk Indicators (KRIs) for monitoring key drivers associated with identified major risks.-Prepare for the Risk Management Committee’s review, necessary exception reports with recommendations for improvement of the entire risk management and reporting system.-Monitor compliance with the company’s ERM policies/procedures on risk limits and assess the impact regulatory requirements will have on the company’s operations.

Internal Audit-To adopt a risk-based approach to planning and executing the internal audit process/activities by directing internal auditing resources at those areas most important to the organization.-Evaluate the adequacy and effectiveness of controls encompassing the organization’s

Notes to the Company Financial StatementsContinued



governance, operations, and information systems.-Develop internal audit plans that identify and assess risks relevant to the activity under review and ensure that the internal auditing objectives reflect the results of the risk assessment.-To contribute to the effectiveness of enterprise risk management, by participating in separate evaluations of internal controls and the ERM programme, and recommending improvements.-To provide advice in the design and improvement of control systems and risk mitigation strategies.-To challenge the basis of management’s risk assessments and evaluate the adequacy and effectiveness of risk treatment strategies.

Risk LandscapeThe company’s risk landscape comprises of the core risks around our business operations and other risks that are external to them. The key risk classifications that have been reported include:

i) Insurance Risk – the risk of loss as a result of improper pricing or/and inadequate reserving. The risk may arise as the insurers are exposed to the risk of timing and expectation of claims and benefit payments. The risk is miptigated through a strong reinsurance programme and effective underwriting strategy that diversifies through appropriate mix.

ii) Operational Risk – the company is exposed to risks associated with process inefficiencies, system failure, human errors and external events. In mitigating the risk we deployed strategies for mining operational loss data and institute effective internal controls to minimise both the occurrence and severity of operational risk.

iii) Market/Financial Risk – the risk of volatility in the financial market that can expose our income streams to market fluctuations, and assets value being jeopardised due to falling stock prices.

iv) Regulatory/Compliance Risk – the risk of loss arising from regulatory infractions that attract fines and penalties. The company deploys appropriate trainings aimed at achieving the status of ‘most significantly- compliant insurer’. The company Governance and Compliance Policies are periodically audited.

v) Competition Risk: the risk of losing business and market share arising from voluntary customer attrition, price war, inefficient work process and poor service delivery. Our company is able to manage this risk through efficient, technology driven premium service delivery and prompt resolution of customer complaints that has enabled the company sustain its market leadership status.

vi) Emerging Risk – these are risks that are developing and/or existing risks that are changing to develop other dependencies. We have envisaged that country risk and product risks will become noticeable in the ensuing periods due to the forthcoming elections, the company’s strategic expansion and business growth. We have scanned the environment and have started putting in place, appropriate structures to mitigate against possible crystalisation of these potential risks.

3.1 Capital Management Policies, Objectives and Approach

Approach to capital management

Leadway seeks to optimise the structure and sources of capital to ensure that it consistently maximises returns to the shareholders and policyholders.




Maximum Regulatory CapitalMaximum authorized capitalPaid up share capital

Company31-Dec-19

N’000

5,000,00010,000,00010,000,000

Company31-Dec-18

N’000

5,000,00010,000,00010,000,000




The Company has different requirements depending on the specific operations which it engages in. The Company's main business is Insurance risk underwriting. The insurance business is divided into life and general insurance business. Note 24a shows the authorized and paid up capital for the life and general insurance businesses.

Insurance industry regulator measures the financial strength of insurers using a solvency generalmargin model. This test compares insurers’ capital against the risk profile. Section 24 (1) of the Insurance Act, 2003 requires that an insurer shall in respect of its business other than its life insurance business, maintain at all times a margin of solvency being the excess of the value of its admissible assets in Nigeria over its liabilities in Nigeria. The solvency margin shall not be less than 15 percent of the gross premium income less reinsurance premiums paid out during the year under review or the minimum paid-up capital which ever is greater. During the year, the Company has complied with this capital requirement. The regulator has the authority to request more extensive reporting and can place restrictions on the Company’s operations if the Company falls below this requirement as deemed necessary.

Leadway's approach to managing capital involves managing assets, liabilities and risks in a coordinated way, assessing shortfalls between reported and required capital level on a regular basis and taking appropriate actions to influence the capital position of the company in the light of changes in economic conditions and risk characteristics. An important aspect of the company's overall capital management process is the setting of target risk adjusted rates of return, which are aligned to performance objectives and ensure that the Company is focused on the creation of value for shareholders.

The Company's primary source of capital includes its equity shareholders’ funds. Leadway also utilizes adequate and efficient reinsurance arrangements to protect shareholders' funds by reducing the need for further funding following unfavorable events such as catastrophes or large claims through treaty and facultative reinsurance arrangements.

The capital requirements are routinely forecast on a periodic basis and assessed against both the forecast available capital and the expected internal rate of return, including risk and sensitivity analyses. The process is ultimately subject to approval by the Board.

The Company has developed a framework to identify the risks and quantify their impact on the economic capital. The framework estimates how much capital is required to reduce the risk of insolvency to a remote degree of probability. The framework has also been considered in assessing the capital requirement.

The Company’s objectives with respect to capital management are to maintain a capital base that is structured to exceed regulatory requirement and to decide on the efficient use of capital by assessing the return on capital allocated to the various classes of business and/or products.

Effective December 2020, the industry's regulatory body (NAICOM) has increased the minimum required regulatory capital for insurance companies as shown below;

1. Life Insurers: Increased to N8 billion from N2 billion2. General Insurers: Increased to N10 billion from N3 billion

This implies that composite insurers like Leadway Assurance will now have its minimum required regulatory capital increased to N18 billion from its current N5 billion.

We will comply with the above listed requirement as a composite insurer.

Continued

Notes to the Company Financial Statements



ASSETSCash and Cash EquivalentsTrade ReceivablesInvestment SecuritiesReinsurance AssetDeferred Acquisition Cost

Other Receivables and PrepaymentsLoans and AdvancesIntangible assetsProperty & EquipmentInvestment PropertiesInvestment in SubsidiariesStatutory DepositTotal Assets

TOTALN'000

26,210,607102,459

300,626,10539,038,453

825,367

2,132,5611,402,795

162,4484,412,066

17,199,0242,153,425

500,000394,765,310

Notes

6789

10

11121713141518

ADMISSIBLEN'000

21,640,794102,459

300,626,10539,038,453

825,367

-69,827

162,4484,412,066

15,757,0912,153,425

500,000385,288,035

INADMISSIBLEN'000

4,569,813----

2,132,5611,332,968

--

1,441,933--

9,477,275

The company's solvency margin as at 31 December 2019 is as follows:

December 2019 December 2018

TOTALN'000

32,978,304395,585

209,289,72043,688,887

851,069

1,417,6021,395,564

255,3393,428,095

16,414,4432,153,425

500,000312,768,033

ADMISSIBLEN'000

32,156,991395,585

209,289,72043,688,887

851,069

-1,395,564

255,3393,428,0957,040,5102,153,425

500,000301,155,185

INADMISSIBLEN'000

821,313----

1,417,602---

9,373,933--

11,612,848

LIABILITIESTrade payablesCurrent Income Tax Liabilities Other LiabilitiesInsurance Contract LiabilitiesInvestment Contract LiabilitiesDeffered Tax Liabilities

Total Liabilities

TOTALN'000

9,690,123859,502

4,539,823296,704,133

26,796,2121,883,284

340,473,077

192021222316

ADMISSIBLEN'000

9,690,123859,502

4,539,823296,704,133

26,796,212-

338,589,793

INADMISSIBLEN'000

-----

1,883,284

1,883,284

December 2019

TOTALN'000

2,564,1941,083,948

14,637,584225,437,157

21,890,9901,883,284

267,497,157

ADMISSIBLEN'000

2,564,1941,083,948

14,637,584225,437,157

21,890,990-

265,613,873

December 2018

INADMISSIBLEN'000

-----

1,883,284

1,883,284

Excess of admissible assets over liabilities

Test I Gross Premium Less: Reinsurance expense Net premium

15% thereof

Test II Minimum paid-up capital The higher thereof:

SURPLUS OF SOLVENCY

Solvency ratio

46,698,242

88,854,306(17,956,199)

70,898,107

10,634,716

5,000,000

36,063,526

439%

35,541,312

87,737,230(16,615,355)

71,121,875

10,668,281

5,000,000

24,873,031

333%







3.2 Asset and liability managementThe Companyis exposed to a range of financial risks through its financial assets, financial liabilities, reinsurance assets and insurance liabilities. In particular, the key financial risk is that in the long-term its investment proceeds are not sufficient to fund the obligations arising from its insurance and investment contracts. The most important components of this financial risk are interest rate risk, equity price risk, foreign currency risk and credit risk.

These risks arise from open positions in interest rate, currency and equity products, all of which are exposed to general and specific market movements. The risks that the Company primarily faces due to the nature of its investments and liabilities are interest rate risk and equity price risk. The Company manages these positions within an ALM framework that has been developed to achieve long term investment returns in excess of its obligations under insurance and investment contracts. Within the ALM framework, the Company periodically produces reports at portfolio, legal entity and asset and liability class level that are circulated to the Company’s key management personnel. The principal technique of the Company’s ALM is to match assets to the liabilities arising from insurance and investment contracts by reference to the type of benefits payable to contract holders. For each distinct class of liabilities, a separate portfolio of assets is maintained. The Company has not changed the processes used to manage its risks from previous periods.

The Company’s ALM is integrated with the management of the financial risks associated with the Company’s other classes of financial assets and liabilities not directly associated with insurance and investment liabilities. The notes below explain how financial risks are managed using the categories utilized in the Company's ALM framework.

Asset Cover Item

Gross Insurance FundsLessReinsurance Receivables

1 Reinsurance2 Reinsurance expenses prepaid3 Reinsurers share of Claims expense paid4 Reinsurers share of Claims expense outststanding5 Reinsurers share of Incurred but not reported claims

Net Insurance FundsAdmissible Assets

1 Cash and Cash Equivalents2 Treasury bills and Government Bonds3 Placement with Financial Insititutions4 Corporate Bonds & Debenture5 Ordinary & Preference Shares6 Agency Loan7 Loan to Policy holders8 Other Loans & Investments9 Investment in subsidiaries,10 Investment in Associates11 Investment in jointly controlled entities12 Investment Properties Total Admissible Assets

SURPLUS(DEFICIT ) IN ASSETS COVER

31-Dec-19Form Current Period

323,500,345

3,193,766492,135

35,352,553

284,461,892

5,428,864265,259,821

20,781,74311,492,17023,874,114

45,699378,220

8,185,951--

15,757,091351,203,673

66,741,781

31-Dec-18Prior

Period

247,316,422

3,127,72568,751

40,492,412

203,627,535

5,644,868177,769,334

27,333,4368,691,659

22,828,72731,550

288,0006,677,050

--

7,040,510256,305,134

52,677,600

% Change

31%

2%616%-13%

40%

-4%32%

-24%49%

5%45%31%23%

124%37%27%





3.2 ASSET AND LIABILITY MANAGEMENT(a) HYPOTHECATION OF ASSETS

As at 31 December 2019(All amounts in thousands of Nigerian Naira unless otherwise stated)

COMPANY

TOTALINVESTMENTS:

Fixed Assets:Real EstateOffice EquipmentsMotor VehiclesFurniture and FittingsIntangible AssetsOthers Investments:Commercial loansLoans to Policy holdersStatutory DepositTreasury BillsGovernment BondsCorporate bondsQuoted SecuritiesUnquoted SecuritiesBank PlacementsBank and Cash BalancesRelated Companies SecuritiesRelated Companies LoansOther assets (see "A" below)TOTAL

Shareholder's fund

30,709,225

-137,583280,110

6,684104,356

-135,829

-300,000

-6,466,7365,813,6704,159,872

648,1533,492,550

--

9,076,15130,621,694

Policy holder's Fund

66,644,120

4,065,450--------

444,68017,380,982

645,9632,773,248

324,07713,970,198

3,846,200--

23,193,32266,644,120

Others

12,163,663

-------------

2,268,538----

9,982,65612,251,194

Shareholder'sfund

23,583,009

12,870,374105,685210,683

21,54658,093

145,519-

200,000132,540

1,573,459267,838

1,048,1482,414,1331,075,685

268,2522,153,425

-1,037,852

23,583,232

DepositAdmin. Fund

26,796,212

------

656,238378,220

-3,181,827

20,684,406532,524866,982

-218,598189,517

--

87,90026,796,212

Annuity Fund

220,634,739

-

-

740,953204,626,724

3,856,2758,638,771

-1,662,9741,109,041

---

220,634,739

Policy holder’s

Fund(LIFE)

9,425,272

263,200----

---

678,6176,535,216

248,309705,675

26,516361,738

15,853

-590,148

9,425,274

Others

5,541,594

----------

2,941,270

------

2,600,0995,541,369

Total

395,497,834

17,199,024243,268490,793

28,230 162,449

-937,586378,220 500,000

5,178,618 260,208,794

11,364,58018,192,695

5,681,41720,781,743

5,428,863 2,153,425

-46,568,128

395,497,833

General Insurance Life

Intangible assetsOther PPE (L &B, WIP, ROUA)

Prepaid Reinsurance & RecoverablesDeferred Acquisition ExpensesPremium DebtorsDeferred Tax AssetsOther assets: (Staff loans , prepayments, and sundry debtors)TOTAL

GENERAL BUSINESS

2,068,776

38,674,736825,367

97,595-

585,65542,252,129

LIFE BUSINESS

1,580,999

363,717-

4,864-

2,366,4194,315,999

COMPANY

3,649,775

39,038,453825,367102,459

-

2,952,07446,568,128

OTHER DETAILS (A)

81Notes to the Company Financial Statements Continued



3.3 Financial risk managementThe Company is exposed to a range of financial risks through its financial instrument, reinsurance assets and insurance liabilities. The key financial risk is that in the long term its investments proceeds are not sufficient to fund the obligations arising from its insurance and investment contracts. The most important components of the financial risks are:- Credit risks- Liquidity risks- Market risks

3.3.1 Credit risksCredit risks arise from the default of a counterparty to fulfil its on and/or offbalance sheet contractual obligations. Exposure to this risk results from financial transactions with a counterparty including issuer, debtor, investee, borrower, broker, policy holder, reinsurer or guarantor.

The Company has policies in place to mitigate its credit risks.

(i) The Company’s Enterprise risk management policy sets out the assessment and determination of what constitutes credit risk for the company. Compliance with the policy is monitored and exposures and breaches are reported to the company’s risk committee. The policy is regularly reviewed for pertinence and for changes in the risk environment.

Net exposure limits are set for each counterparty or company of counterparties, geographical and industry segment (i.e. limits are set for investments and cash deposits, foreign exchange trade exposures and minimum credit ratings for investments that may be held).

(ii) The Company’s set guidelines determine when to obtain collateral and guarantees. The Company also maintains strict control limits by amount and terms on financial assets. The amounts subject to credit risk are limited to the fair value of ‘in the money’ financial assets against which the Company either obtains collateral from counterparties or requires margin deposits. Collateral may be sold or repledged by the Company and is repayable if the contract terminates or the contract’s fair value falls.

(iii) Reinsurance is placed with counterparties that have a good credit rating and concentration of risk is avoided by following policy guidelines in respect of counterparties’ limits that are set each year by the management and are subject to regular reviews. At each reporting date, management performs an assessment of creditworthiness of reinsurers and updates the reinsurance purchase strategy, ascertaining suitable allowance for impairment.

(iv) The Company sets the maximum amounts and limits that may be advanced to corporate counterparties by reference to their long–term credit ratings and



worthiness.

(v) The credit risk in respect of customer balances incurred on non–payment of premiums or contributions will only persist during the grace period specified in the policy document or trust deed until expiry, when the policy is either paid up or terminated. Commission paid to intermediaries is netted off against amounts receivable from them to reduce the risk of doubtful debts.

(vi) In evaluating credit risk (impairment), the company determines impairment on loans that are not specifically impaired using a model in line with the requirements of IFRS as follows:

Impairment = EAD * PD * LGD

the parameters are defined as follows:

1. Probability of default (PD) : This is the probability that a counterparty will defualt on an exisiting commitment usually over a 12 months period

2. Loss given default (LGD) : This is the portion of a loan or receivable determined to be irrecoverable, our methods considers prior period experience, other qualitative factors and future economic prospect

3. Exposure at default (EAD): This represents the amount that is due or outstanding at the time of default.




Company31-Dec-19

26,204,721102,459

235,720,99541,030,99635,844,688

760,069

1,402,795500,000

341,566,723

Company31-Dec-18

32,975,063395,585

153,254,49333,206,50040,561,162

723,613

1,395,564500,000

263,011,980

Note

67

8.18.2

9

11

1218

Cash and cash equivalents (See note 1 below)Trade receivablesInvestment securities:- Fair value through profit or loss (See note 2 below)- Available for saleReinsurance Assets (See note 3 below)

Other receivables (See note 4 below)

Loans and advancesStatutory deposits

Total assets exposed to credit risk

3.3.1.1 Maximum exposure to credit risk

1. Cash and cash equivalents excludes the balance representing cash in hand which is not exposed to credit risk.

2. Assets measured at fair value through profit or loss and Available for sale financial instrument do not include the balance of equity securities in these classes of asset as equity securities are not exposed to credit risk.

3. Reinsurance Assets only includes amount recoverable on claims reported (excluding IBNR) and amount due from reinsurers. The balance on prepaid reinsurance is excluded from this analysis.

4. Other receivables excludes prepayments and other non financial assets. (see note 11)

The urther manages its exposure to credit risk through counterparty risk via Company festablished limits as approved by the Board. These limits are determined based on credit ratings of the counterparty amongst other factors. All fixed income investments are measured for performance on a quarterly basis and monitored by management on a monthly basis.




Company31-Dec-19

19,783,4764,569,8131,851,432

26,204,721

Company31-Dec-18

30,296,857821,313

1,856,89332,975,063

Counterparty

National banksForeign banksInvestment house

3.3.1.2 Counterparty risk(a) Cash and cash equivalent The company and company's counterparty exposure of its cash and cash equivalent is represented

below:

Company31-Dec-19

76%17%

7%100%

Company31-Dec-18

92%2%6%

100%

Counterparty

National banksForeign banksInvestment house

(b) Investment securities The company and company's counterparty exposure of its investment securities is represented below:

Company31-Dec-19

264,792,768868,794

11,090,429276,751,991

Company31-Dec-18

176,924,863938,363

8,597,767186,460,993

Counterparty

Federal Government of NigeriaState Government in NigeriaCorporates with acceptable risk ratings


(c) Trade receivables Credit risk exposure to trade receivables arises from the 30 days window given by

NAICOM in the "No Premium No Cover" policy. This give the brokers latitude to withhold premium collected from the insured for 30 days before remittance. However, they are expected to issue their credit note and remit the premium on or before the expiration of the 30 days grace period. Brokers who fail to remit are reported on a quarterly basis to NAICOM and are subject to the downgrading process in line with the Company's policy. The Company's risk exposure to credit risk is low as the receipt of insurance premium from the insured is a pre-condition for the issuance of insurance cover.

(d) Loans and advances Credit risk exposure to direct business is low as the Company requires debtors to provide

guarantees before inception of insurance policies. The Company's exposure to credit risk arising from brokered business is relatively moderate and the risk is managed by the Company's internal rating model for brokers. Our credit risk internal rating model is guided by several weighted parameters which determine the categorization of brokers the Company transacts businesses with.

(e) Reinsurance receivable Reinsurance contract is executed only with reinsurers with a minimum acceptable credit

rating. Management monitors the credit worthiness of reinsurers by reviewing their annual financial statements and through ongoing communications. Reinsurance treaties are reviewed annually by management prior to renewal of reinsurance contracts.



AA+/AA-

7,754,023

1,847,477

54,380----

-

-

-9,655,880

A+/A-

13,432,901

1,573,446

6,524,338----

-

-

-21,530,685

BB+/BB-

4,380,750

232,300,072

34,324,688 - - -

500,000

-

-

-271,505,510

UNRATED

637,047

-

127,590102,459

1,295,437760,069

-

35,844,688

107,358

356,457

(324,754)38,906,351

6

8.1

8.27

121118

9

Neither past due nor impaired

Cash and cash equivalents (excl. cash on hand)Investment securities - FVTPL (excl. equity)Investment securities - AFS (excl. equity)Trade receivablesLoans and advancesOther receivables - financial assetsStatutory depositsReinsurance assets (Due from reinsurers)

Past due but not impairedLoans and advances

Past due and impairedLoans and advances

Less specific impairment on past due and impaired:Loans and advances

Company2019

TOTAL

26,204,721

235,720,995

41,030,996102,459

1,295,437760,069500,000

35,844,688

107,358

356,457

(324,754)341,598,426

AA+/AA-

10,568,316

-

----

-

-

-

-

10,568,316

A+/A-

19,035,155

1,645,7091,202,099

----

-

-

-

-

21,882,963

BB+/BB-

920,006

151,394,87531,879,954

---

500,000

-

-

-

184,694,835

UNRATED

2,451,586

213,908124,448395,585

1,155,822723,613

-

40,561,162

239,742

351,008

(308,842)

45,908,031

6

8.18.2

7121118

Neither past due nor impaired

Cash and cash equivalents (excl. cash on hand)Investment securities - FVTPL (excl. equity)Investment securities - AFS (excl. Trade receivablesLoans and advancesOther receivables - financial assetsStatutory depositsReinsurance assets (Due from reinsurers)

Past due but not impairedLoans and advances

Past due and impairedLoans and advances

Less specific impairment on past due and impaired:Loans and advances

Company2018

TOTAL

32,975,063

153,254,49333,206,500

395,5851,155,822

723,613500,000

40,561,162

239,742

351,008

(308,842)

263,054,146




Global Corporate Rating (GCR)'s rating symbols and DefinitionsAAA Extremely strong financial security characteristics and is the highest FSR assigned by GCR.AA+ Has very strong financial security characteristics, differing only slightly from those rated higher.AAAA-A+ Has strong financial security characteristics, but is somewhat more likely to be affected by adverse A business conditions than assurers with higher ratings.A-BBB+ Has good financial security characteristics, but is much more likely to be affected by adverse business BBB conditions than assurers with higher ratings.BBB-BB+ Has vulnerable financial security characteristics, which might outweigh its strengths. The ability of

these companies to discharge obligations is not well safeguarded in the future.

Company31-Dec-19

324,754--

324,754

Company31-Dec-18

203,855--

203,855

Past due and impaired0 - 90 days90 - 180 days181 days and above




Financial institution

26,204,721

3,080,604

4,354,119

-728,094

-500,000

35,844,68870,712,226

Financial institution

32,975,063

1,240,317

5,315,614-

514,162-

500,00040,561,16281,106,318

Manufacturing/telecom

-

-

-

-

----

Manufacturing/telecom

-

-

--

----

Public sector

-

230,867,769

32,034,441 - -- - - -

262,902,210

Public sector

-

151,369,243

27,451,035 - - - - -

178,820,278

Others

-

1,772,622

4,642,436 -

102,459 674,701 760,069

- -

7,952,287

Others

-

644,933

439,851 395,585 881,402 723,613

- -

3,085,384

Company 2019

Cash and cash equivalentsInvestment securities - FVTPL (excl. equity)Investment securities - AFS (excl. equity)Investment securities - HTMTrade receivableLoans and advancesOther receivables - financial assetsStatutory depositsReinsurance AssetsTotal Company 2018

Cash and cash equivalentsInvestment securities - FVTPL (excl. equity)Investment securities - AFS (excl. equity)Trade receivableLoans and advancesOther receivables - financial assetsStatutory depositsReinsurance AssetsTotal

6

8.1

8.207

121118

9

6

8.1

8.27

121118

9

Total

26,204,721

235,720,995

41,030,996

102,459 1,402,795

760,069 500,000

35,844,688 341,566,723

Total

32,975,063

153,254,493

33,206,500 395,585

1,395,564 723,613 500,000

40,561,162 263,011,980

ANNUAL REPORT& ACCOUNTES 201988



Concentration of credit risk

3.3.2 Liquidity risks

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial instruments. In respect of catastrophic events there is also a liquidity risk associated with the timing differences between gross cash out–flows and expected reinsurance recoveries.

The following policies and procedures are in place to mitigate the company’s exposure to liquidity risk:

- The Company's liquidity risk policy which sets out the assessment and determination of what constitutes liquidity risk for the company. Compliance with the policy is monitored and exposures and breaches are reported to the company’s risk committee. The policy is regularly reviewed for pertinence and for changes in the risk environment.

- Guidelines are set for asset allocations, portfolio limit structures and maturity profiles of assets, in order to ensure sufficient funding available to meet insurance and investment contracts obligations.

- Contingency funding plans are in place, which specify minimum proportions of funds to meet emergency calls as well as specifying events that would trigger such plans.

The table that follows summarizes the maturity profile of the non–derivative financial assets and financial liabilities of the Company based on remaining undiscounted contractual obligations, including interest payable.

For insurance contracts liabilities and reinsurance assets, maturity profiles are determined based on estimated timing of net cash outflows from the recognised insurance liabilities. Unearned premiums and the reinsurers’ share of unearned premiums have been excluded from the analysis as they are not contractual obligations.

Repayments which are subject to notice are treated as if notice were to be given immediately.





Maturity analysis (contractual undiscounted cash flow basis for non–derivatives)

Using the behavioural pattern of our funding sources over time, the Company's expected cash flows on some financial assets and liabilities to vary significantly from the contractual cash flows. As part of management of liquidity risk arising from financial liabilities, the Company maintains a portfolio of highly marketable and diverse assets that can be easily liquidated in the event of an unforeseen interruption of cash flow.

The table below shows the undiscounted cash flow on the Company's financial assets and liabilities and on the basis of the earliest possible contractual maturity. The gross nominal inflow/outflow disclosed in the table is the contractual, undiscounted cash flows on the financial assets and liabilities. Whilst the table below have been prepared based on the contractual maturities, the maturity profile based on the behavioural pattern of the assets and liabilities observed over a very long period (five years) presents management with a reliable basis to manage the inherent liquidity risks.

Carrying amount

26,210,607 102,459

238,425,827 62,200,278

35,844,688

760,069 1,402,795

500,000

365,446,723

9,690,123 2,822,414

271,787,02326,796,212

311,095,772

54,350,951

Gross nominal

26,280,983102,459

675,557,975112,852,062

35,844,688

760,0691,615,850

500,000

853,514,086

9,690,1232,996,236

651,683,56626,796,212

691,166,137

162,347,949

0-3 months

26,280,983102,459

8,997,8469,564,554

21,381,607

760,069795,346

-

67,864,864

9,690,1231,815,669

54,583,4991,321,951

67,411,242

453,622

3-6 months

- -

7,342,519 3,254,650

14,463,081

- 117,193

-

25,177,443

9,690,1231,180,567

7,318,604 682,032

9,181,203

15,996,240

Company

31 December 2019

AssetsCash and cash equivalentsTrade receivablesInvestment securities - FVTPLInvestment securities - Available for saleReinsurance assets (Excl. prepaid reinsurance)Other receivables - financial assetsLoans and advancesStatutory deposit

Total financial assets

Trade payablesOther liabilities - financial liabilitiesInsurance contract liabilities (excl. IBNR and unearned premium))Investment contract liabilities

Total financial liabilities

Gap

Note

67

8.18.2

9

111218

1921

2223

6-12 months

- -

13,804,130 12,695,587

-

- 233,961

-

26,733,678

--

14,633,950 1,079,130

15,713,080

11,020,598

1-5 years

- -

123,872,622 25,328,829

-

- 469,350

-

149,670,801

--

116,424,810 10,811,387

127,236,197

22,434,604

Over 5 years

- -

521,540,858 62,026,443

-

- -

500,000

584,067,301

- -

458,722,703 12,901,713

471,624,417

112,442,885

Contractual maturities of financial assets and liabilities




Carrying amount

32,978,304 395,585

156,009,761 53,279,959

40,561,162

723,613 1,395,564

500,000

285,843,948

2,564,194 3,459,082

207,217,34421,890,990

235,131,610

50,712,338

Gross nominal

35,136,623 357,441

464,320,161 58,867,116

40,561,163

520,662 1,609,670

500,000

601,872,836

2,564,194 1,702,618

207,217,342 21,890,990

233,375,144

368,497,692

0-3 months

33,221,646 214,465

7,096,944 1,139,039

9,877,010

520,662 792,304

-

52,862,070

1,538,516 30,000

4,144,347 1,010,795

6,723,658

46,138,412

3-6 months

1,914,977 142,976

3,723,570 418,249

16,776,921

- 116,745

-

23,093,438

1,025,678 1,482,515

7,252,607 559,033

10,319,833

12,773,605

Company

31 December 2018

Cash and cash equivalentsTrade receivablesInvestment securities - FVTPLInvestment securities - Available for sale Reinsurance assets (Excl. prepaid reinsurance)Other receivables - financial assetsLoans and advancesStatutory deposit




Gap

Notes

67

8.18.2

9

111218

1921

2223

6-12 months

- -

10,967,077 1,830,568

13,907,232

- 233,066

-

26,937,943

- 190,103

10,360,867 884,518

11,435,488

15,502,455

1-5 years

- -

92,332,734 25,172,473

-

- 467,555

-

117,972,762

--

12,433,040 8,861,645

21,294,685

96,678,077

Over 5 years

- -

350,199,836 30,306,787

-

- -

500,000

381,006,623

- -

173,026,481 10,574,999

183,601,480

197,405,143

Contractual maturities of financial assets and liabilities

It is not expected that cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.



(g) Market risks

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: foreign exchange rates (currency risk), market interest rates (interest rate risk) and market prices (price risk).- The Company’s enterprise risk management policy sets out the assessment and determination of what constitutes market risk . Compliance with the policy is monitored and exposures and breaches are reported to the company risk committee. The policy is reviewed regularly for pertinence and for changes in the risk environment.- Guidelines are set for asset allocation and portfolio limit structure, to ensure that assets back specific policyholder's liabilities and that assets are held to deliver income and gains for policyholders which are in line with expectations of the policyholders.- The Company stipulates diversification benchmarks by type of instrument and geographical area, as the Company is exposed to guaranteed bonuses, cash and annuity options when interest rates falls.

(h) Currency risk

Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Company's principal transactions are carried out in Naira and its exposure to foreign exchange risk arise primarily with respect to US dollar and CFA.

The Company’s financial assets are primarily denominated in the same currencies as the related insurance and investment contract liabilities. The main foreign exchange risk arises from recognised assets and liabilities denominated in currencies other than those in which insurance and investment contract liabilities are expected to be settled.

The table below summarises the Company’s financial assets and liabilities by major currencies. Note that irrespective of the currency in which the assets are held, the amounts disclosed against individuals currencies are the Naira equivalent of the respective currencies. The exchange rates applied for each of the listed currencies have been obtained from reliable sources depicting reliable market transactions on 31 December 2019.




Naira (N)

5,887,994 102,459

235,092,745 37,986,764

5,534,709

676,471 1,402,795

500,000

287,183,937

5,154,739 2,822,414

231,004,624 26,796,212

265,777,990

21,405,948

US Dollars (USD)

19,855,546 -

3,333,082 24,213,514 30,309,979

- - -

77,712,121

4,535,384 -

40,782,399 -

45,317,783

32,394,338

UK Pound Sterling (GBP)

223,581- ---

---

223,581

- -

--

-

223,581

Euro

243,487- - - -

- - -

243,487

--

--

-

243,487

Company

31 December 2019

Cash and cash equivalentsTrade receivablesInvestment securities - FVTPLInvestment securities - Available for sale Reinsurance assets (Excl. prepaid reinsurance)

Other receivables - financial assetsLoans and advancesStatutory deposits




Net FCY exposure

Notes

67

8.18.2

9

111218

1921

2223

CFA France CFA

- - - --

83,598--

83,598

--

--

-

83,598

Others

---

-

---

-

-

-

-

-

Total

26,210,607 102,459

238,425,827 62,200,278 35,844,688

760,069 1,402,795

500,000

365,446,723

9,690,123 2,822,414

271,787,023 26,796,212

311,095,773

54,350,951

93ANNUAL REPORT& ACCOUNTS 2019



Naira (N)

6,609,820 395,585

152,278,951 29,638,069

1,574,878 723,613

1,169,834 500,000

192,890,750

2,005,234 3,459,082

158,410,066 21,890,990

185,765,372

7,125,378

US Dollars (USD)

26,210,499 -

3,730,810 23,641,890 38,920,142

- 225,730

-

92,729,071

558,960 -

48,807,278 -

49,366,238

43,362,833

UK Pound Sterling (GBP)

22,023 - - -

1,350 - - -

23,373

- -

--

-

23,373

Euro

31,350 - - -

64,792 - - -

96,143

--

--

-

96,143

Company

31 December 2018

Cash and cash equivalentsTrade receivablesInvestment securities - FVTPLInvestment securities - Available for sale Reinsurance assets (Excl. prepaid reinsurance)Other receivables - financial assetsLoans and advancesStatutory deposits




Net FCY exposure

Notes

67

8.18.2

9111218

1921

2223

CFA France CFA

104,612- - -- - --

104,612

--

--

-

104,612

Others

---

---

-

-

-

-

Total

32,978,304 395,585

156,009,761 53,279,959 40,561,162

723,613 1,395,564

500,000

285,843,949

2,564,194 3,459,082

207,217,344 21,890,990

235,131,610

50,712,339

94 ANNUAL REPORT& ACCOUNTS 2019



Foreign currency sensitivity

The tables below shows the sensitivity of the Company’s profit before tax to appreciation or depreciation of the naira in relation to other currencies. Based on the past years behaviour, it is reasonable to assume 1000 basis points appreciation and 1000 basis points depreciation of the Naira holding all other variables constant.

31 December 2019 31 December 2018

Company

Currency

US DollarPound sterlingEuroUS DollarPound sterlingEuro

Change in variables

+ 1000 basis points+ 1000 basis points+ 1000 basis points- 1000 basis points- 1000 basis points- 1000 basis points

Impact on profit before

tax

3,239,434 22,358 24,349

(3,239,434) (22,358) (24,349)

Impact on equity

2,267,604 15,651 17,044

(2,267,604) (15,651)(17,044)

Impact on profit before

tax

4,336,283 2,337 9,614

(4,336,283) (2,337)(9,614)

Impact on equity

3,035,398 1,636 6,730

(3,035,398)(1,636)(6,730)

(i) Interest rate risks:

Interest rate risk is the risk that the value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Exposure to this risk primarily results from timing differences in the repricing of assets and liabilities as they mature ( fixed rate instruments) or contractually repriced (floating rate instruments).

The Company monitors this exposure through periodic reviews of the assets and liability position. Estimates of cash flows, as well as the impact of interest rate fluctuations relating to the investment portfolio and insurance provisions are modeled and reviewed .

The overall objective of these strategies is to limit the net change in value of assets and liabilities arising from interest rate movements.

While it is more difficult to measure the interest sensitivity of insurance liabilities than that of the related assets, to the extent that such sensitivities are measurable then the interest rate movements will generate asset value changes that substantially offset changes in the value of the liabilities relating to the underlying products. The table below details the interest rate sensitivity analysis of the Company as at 31 December 2019 holding all other variables constant. Based on historical data, 100 basis points change is deemed to be reasonably possible and are used when reporting interest rate risk.




Non-interest bearing

5,304,7119,153,567

26,984,5997,231

-

41,450,108

-

-

41,450,10841,450,108

---

Non-interest bearing

5,138,147-

0--

5,138,147

--

-

5,138,1475,138,147

Total

26,210,607238,425,827

62,200,278 1,402,795

500,000

328,739,507

26,796,212

26,796,212

301,943,294

57,891,129 17,367,339 40,523,791

Carrying amount

32,978,304 156,009,761

53,784,919 1,395,564

500,000 244,668,548

21,890,990 -

21,890,990

222,777,558

37,253,340 11,176,002 26,077,338

0-3 months

20,905,896-

597,845

-

21,503,741

1,321,951

1,321,951

20,181,79061,631,898

6,163,190 1,848,9574,314,233

0-3 months

27,840,157--

-27,840,157

1,010,795-

1,010,795

26,829,36231,967,509

3,196,751959,025

2,237,726

3-6 months

-2,680,505

2,511149,301

-

2,832,317

682,032

682,032

2,150,28563,782,183

6,378,2181,913,4664,464,753

3-6 months

-2,386,215

382,364149,301

-2,917,880

559,033-

559,033

2,358,84734,326,356

3,432,6361,029,7912,402,845

Company31 December 2019

Cash and cash equivalentsInvestment securities - FVTPLInvestment securities - AFSLoans and advancesStatutory deposits

Total

Investment contract liabilities

Total

Gap Cumulative gap

Impact on profit before tax Taxation at 30% Impact on equity


Cash and cash equivalentsInvestment securities - FVTPLInvestment securities - AFSLoans and advancesStatutory depositsTotal

Investment contract liabilitiesBorrowings

Total

Gap Cumulative gap

Impact on profit before taxTaxation at 30%Impact on profit after tax

Notes6

8.18.21218

23

68.18.21218

23

6-12 months

-168,093

65,461400,468

-

634,022

1,079,130

1,079,130

(445,108)63,337,075

6,333,7071,900,1124,433,595

6-12 months

-336,052

3,182,306400,468

-3,918,826

884,518-

884,518

3,034,30837,360,664

3,736,0661,120,8202,615,246

Over 5 years

-206,227,147

19,901,015-

500,000

226,628,162

12,901,713

12,901,713

213,726,449301,943,294

30,194,3299,058,299

21,136,031

Over 5 years

-141,807,344

44,943,897-

500,000187,251,241

10,574,999-

10,574,999

176,676,242222,777,558

22,277,7566,683,327

15,594,429

1-5 years

-20,196,51514,648,846

845,795-

35,691,156

10,811,387

10,811,387

24,879,76988,216,844

8,821,6842,646,5056,175,179

1-5 years

-11,480,151

5,276,352845,795

17,602,298

8,861,645-

8,861,645

8,740,65346,101,316

4,610,1321,383,0393,227,092




(j) Equity price risk

The Company manages its exposure to equity price risk through adherence to investment in eligible equities as approved by the Board and in line with NAICOM investment guidelines. Management Investment Committee establishes and approves a list of eligible stocks in line with approval as approved by the Board through its Board Investment Committee. The investment decisions are subject to authorization(s) levels.

Management Investment Committee1. An investment which would result in exposure to the invested company for not greater

than 5% of the issue under consideration i.e. Equities, Bonds etc.2. Investment in any unquoted stock with value less than N500m.

Board Investment Committeei. An investment which would result in exposure to the invested company for greater than

5% of the issue under consideration.ii. Any investment where the value of total exposure to the invested corporate on

completion, as a percentage of total Leadway’s Asset Under Management will exceed 2.5% as at the time of the investment.

iii. An Investment in any unquoted stock with value greater than N500m.iv. Investment in a start-up venture with value over N100m.v. Investments in a company, which will result in the Leadway having control of management.vi. Securities lending, leveraged investments, derivatives or hedging.

We have exposure to equity risk through asset/liability mismatches, including our investments in equity securities held in our investment portfolio. Changes in equity prices create risk that the resulting changes in asset values will differ from the changes in the value of the liabilities. Additionally, changes in equity prices may impact other items including, but not limited to investment income of the Company.

Financial assets

Listed equities (FVTPL) Listed equities(AFS) Unlisted equities (AFS) Impact on profit before tax Tax charge of 30%

Impact on profit after tax

Impact on equity

Company31-Dec-19

+/- 1500 basis points

405,725 2,323,180

852,213 405,725

(121,717)

284,007

3,459,400

Company31-Dec-18

+/- 2000 basis points

275,527 1,087,383

919,963 275,527 (82,658)

192,869

2,200,215




3.4 Fair values of financial assets and liabilities

Accounting classification, measurement basis and fair valuesThe table below sets out the Croup's classification of each class of financial assets and liabilities, and their fair valuesot limited to investment income of the Company.

98

At fair value through P/L

- -

238,425,827-

- - - -

238,425,827

- -

224,547,452 -

224,547,452

Held to Maturity

- - --

- - --

-

- -

-- -


26,210,607 102,459

- -

35,844,688 760,069

1,402,795 500,000

64,820,618

- -

- -

-


Assets Cash and cash equivalents Trade receivables Investment securities - FVTPL Investment securities - AFS Reinsurance assets (Excl. prepaid reinsurance) Other receivables Loans and advances Statutory deposits

Total

Liabilities

Trade payablesOther liabilitiesInsurance contract liabilities (excl. IBNR and unearned premium))Investment contract liabilities

Total

Available for sale

- - -

62,200,278

- - - -

62,200,278

- -

- -

-

Other financial liabilities at

amortised cost

- - - -

- - - -

-

9,690,123 2,822,414

47,239,571 26,796,212

86,548,321

Total carrying amount

26,210,607 102,459

238,425,827 62,200,278

35,844,688 760,069

1,402,795 500,000

365,446,723

9,690,123 2,822,414

271,787,023 26,796,212

311,095,773

Fair Value

26,210,607 102,459

238,425,827 62,200,278

35,844,688 760,069

1,402,795 500,000

365,446,723

9,690,123 2,822,414

271,787,023 26,796,212

311,095,773

Notes

6 7

8.1 8.2

9 10 1218

19 21

2223




At fair value through P/L

- -

156,009,761 -

- - - -

156,009,761

- -

150,428,171-

150,428,171

Held to Maturity

- - --

- - --

-

- -

-- -


32,978,304 395,585

- -

40,561,162 723,613

1,395,564 500,000

76,554,228

- -

- -

-


Assets Cash and cash equivalents Trade receivables Investment securities - FVTPL Investment securities - AFS Reinsurance assets (Excl. prepaid reinsurance) Other receivables Loans and advances Statutory deposits

Total

Liabilities

Trade payablesOther liabilitiesInsurance contract liabilities (excl. IBNR and unearned premium)Investment contract liabilities

Total

Notes

6 7

8.1 8.2

9 10 1218

19 21

2223

Available for sale

- - -

53,279,959

- - - -

53,279,959

- -

- -

-

Other financial liabilities at

amortised cost

- - - -

- - - -

-

2,564,194 3,459,082

56,789,173 21,890,990

84,703,439

Total carrying amount

32,978,304 395,585

156,009,761 53,279,959

40,561,162 723,613

1,395,564 500,000

285,843,948

2,564,194 3,459,082

207,217,344 21,890,990

235,131,610

Fair Value

32,978,304 395,585

156,009,761 53,279,959

40,561,162 723,613

1,395,564 500,000

285,843,948

2,564,194 3,459,082

207,217,344 21,890,990

235,131,610




3.4.1 Fair value hierarchy

The Company's accounting policy on fair value measurement is disclosed in note 2.6. The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). These may include quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets and liabilities in markets that are not active.

Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data (that is, unobservable inputs). It also includes financial instruments whose fair values could not be reliably determined and so they were measured at cost.

(a) The following table presents the financial assets and liabilities that are measured at fair value as at 31 December 2019. See note 4.1b for non-financial assets that are measured at fair value.




Level 1

2,705,428 230,712,790

167,210 4,840,399

15,338,757 -

41,030,996 294,795,580

Level 1

2,755,268 124,218,042

- -

10,873,826 -

33,624,019 -

171,471,155


All amounts are in thousands of Naira unless otherwise stated

AssetsInvestment securities:Fair value through profit or loss - Equity securities- Federal government bond- State government- Corporate bonds

Available for sale- Listed equity securities- Unlisted equity securities at cost- Listed debt securitiesTotal



AssetsInvestment securities:Fair value through profit or loss - Equity securities- Federal government bond- State government- Corporate bonds-Available for sale- Listed equity securities- Unlisted equity securities at cost- Listed debt securities- Unlisted equity securitiesTotal

Level 2

- - - -

149,107 - - -

149,107

Level 2

- -

1,174,286 2,286,615

-

- - -

2,939,739 6,400,640

Level 3

- - - - -

- 5,681,418

- 5,681,418

Level 3

- - - -

- 1,559,679

- 1,774,017 3,333,696

Total

2,705,428 230,712,790

167,210 4,840,399

-

15,487,864 5,681,418

41,030,996 300,626,105

Total

2,755,268 124,218,042

1,174,286 2,286,615

-

10,873,826 1,559,679

33,624,019 4,713,756

181,205,491

There were no transfers between levels 1 and 2 during the year

(i) Financial instruments in level 1The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry company, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The quoted market price used for financial assets held by the company is the current bid price.

(ii) Financial instruments in Level 2The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

Specific valuation techniques used to value financial instruments include:(i) Quoted market prices or dealer quotes for similar instruments;(ii) Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments

The Company's level 2 corporate bonds, state bonds and unlisted equities were valued using quoted market prices for similar instruments at the measurement date.




(iii) Financial instruments in level 3

The following table presents the changes in Level 3 instruments for the year ended 31 December 2019


Equity securities - Available for sale

Opening balance Acquisitions Disposals Reclassification from investments at cost less impairment (see note 8.2.1a)

Reclassifications from Level 2Changes in fair value recognised in other comprehensive income

Balance, end of year

Company31-Dec-19

2,656,311 465,000

- 1,080,000

3,033,000 (1,558,000)

5,676,311

Company31-Dec-18

2,272,484 - -

183,000

-200,827

2,656,311

Varying valuation techniques in determining the fair value of Level 3 item, investments in AFC, Capital Bancorp, Lekky Budget Limited, Mainstreet Technologies, Oakwood Park Limited, Energy & Allied Limited, JDI Investment Company, Nigeria Liability Insurance Pool are as follows:

Valuation technique

Market Approach

Unobservable inputs

P/BV multiples

EV/EBITDA multiples

Range of unobservable inputs (probability - weighted average)

0.85x - 5.88x

5.73x - 15.57x

Relationship of unobservable inputs to fair value

The higher the multiples the higher the fair value of the asset.

EV/EBITDA or P/E valuation multiple - the company determines appropriate comparable public company/ies based on industry, size, developmental stage, revenue generation and strategy. The company then calculates a trading multiple for each comparable company identified. The multiple is calculated by either dividing the quoted price of the comparable company by its net income (P/E).

Financial instruments not measured at fair value

The following table sets out fair values of financial instruments not measured at fair value and analyses them by level in the fair value hierarchy into which each fair value measurement is categorised.




Level 1

-

- - - -

- - - - - - -

---

-



Assets

Cash and cash equivalentsHeld to maturity investment securities:State bondsCorporate bonds Federal government bonds Federal government treasury bills Available for sale: Unlisted equity at cost Trade receivables Loans and advances Reinsurance assets (Excl. prepaid reinsurance) Other receivables Statutory deposits


Liabilities

Investment contract liabilities Trade payables Other liabilities


Level 2

26,210,607

- - - -

- - - - - -

26,210,607

---

-

Level 3

-

- - --

102,4591,402,795

35,844,688

760,069--

38,110,011

26,796,2129,690,1232,822,414

39,308,750

Total

26,210,607

- - - -

102,459 1,402,795

35,844,688

760,069 - -

64,320,618

26,796,212 9,690,123 2,822,414

39,308,750




Level 1

-

----

----

--

-

---

-



Assets

Cash and cash equivalents Held to maturity investment securities:State bondsCorporate bonds Federal government bonds Federal government treasury bills Available for sale: Unlisted equity at cost Trade receivables Loans and advances Reinsurance assets (Excl. prepaid reinsurance) Other receivables Statutory deposits


Liabilities Investment contract liabilities Trade payables Other liabilities


Level 2

32,978,304

- ---

----

--

32,978,304

---

-

Total

32,978,304

- - - -

- 395,585

1,395,564 40,561,162

723,613 -

76,054,228

21,890,990 2,564,194 3,459,082

-

27,914,266

Level 3

-

----

-395,585

1,395,56440,561,162

723,613-

43,075,924

21,890,9902,564,1943,459,082

-

27,914,266

The fair value for financial assets and liabilities that are not carried at fair value were determined respectively as follows:

(i) CashIncluded in the balances of cash and cash equivalents are cash and balances with banks and short term placement. The carrying amount of cash and cash equivalents is a reasonable approximation of fair value.

(ii) Loans and advancesThe estimated fair value of loans and advances represents the discounted amount of estimated future cashflows expected to be received. Expected future cashflows are discounted at the current market rate to determine the fair value.

(iii) Trade receivables, Other Receivables, Reinsurance Assets (Excl. prepaid reinsurance), Trade payables and Other liabilitiesThe estimated fair value of receivables and payables with no stated maturity which includes no interest payables and receivables is the amount repayable or received on demand. The carrying amounts are reasonable approximation of their fair values which are payable on demand.

(iv) Investment contract liabilitiesInvestment contracts are those that do not transfer significant insurance risk from the contract holder to the issuer. The carrying amount of investment contract liability is a reasonable approximation of fair value.




3.4 Management of insurance risk

The Company issues contracts that transfer insurance risk or financial risk or both. This section summarizes these risks and the way the Company manages them.

Insurance Risk Insurance risk arises from accepting risks which turn out to be inappropriate or pricing the risks accepted inappropriately. The principal risk that the Company faces under its insurance contracts is that the actual claims and benefits payments exceed the carrying amount of the insurance liabilities. This could occur because the frequency or severity of claims and benefits are greater than estimated. Insurance events are random, and the actual number and amount of claims and benefits could vary from year to year from the level established using statistical techniques.

Our insurance underwriting strategy has been developed in such a way that the types of insurance risks accepted are diversified to achieve a sufficiently large population of risks to reduce the variability of the expected outcome. Insurance risk is increased by the lack of risk diversification in terms of type and amount of risk, geographical location and type of industry covered.

General Insurance Contracts(a) Frequency and severity of claims: The frequency and severity of claims can be affected by several factors. The most significant are the increasing level of awards for the damages suffered as a result of road accidents. The Company manages these risks through its underwriting strategy, adequate reinsurance arrangements and proactive claims handling and investigations.

Underwriting limits are in place to enforce appropriate risk selection criteria. For example, the Company has the right not to renew certain policies, it can impose excess or deductibles and has the right to reject the payment of a fraudulent claim. Insurance contracts also entitle the Company to pursue third parties for payment of some or all of claims costs. The reinsurance arrangements include excess and proportional coverage. The effect of such reinsurance arrangements is that the Company should not suffer total net insurance losses in any one year.

The Company has a specialized claims unit that ensures mitigation of the risks surrounding all known claims. This unit investigates and adjusts all claims in conjunction with appointed loss adjusters. The Company actively manages and pursues early settlements of claims to reduce its exposure to unpredictable developments.

Company Life ReinsuranceThe table below shows the Company life risk exposure by industry or sector in 2019. The table shows that the company’s exposure is highly skewed towards Civil Service/Government agency followed by Estate Management/Insurance, Banking & Financial Institutions.

Before Reinsurance

241,999,824,22728,122,248,39277,380,822,431

280,055,160,17037,904,653,42517,588,281,80210,653,473,75926,290,175,70023,088,800,951

99,157,329,11151,992,685,36221,938,204,60960,283,093,781

35,145,440,00095,005,134,073

217,181,311,8291,323,786,639,622


Industry/Sector

Civil Service/Government AgencyEducation, Research & Professional InstitutionsEngineering & ConstructionEstate Management/Insurance, banking & Financial InstitutionsFoods & Beverages/Agro-alliedHealth Service providerHotels and Resorts/catering servicesManufacturingMarine & AviationMarketing & Consulting/Supplies & Trading/Courier ServicesOthersNNPCOil & GasRadio & Television/ Electronics & TelecommunicationsReligious institutions/NGO/Clubs& AssociationsSecurity Personnel

Share of Gross

18%2%6%

21%3%1%1%2%2%

7%4%2%5%

3%7%

16%100%

After Reinsurance

240,408,490,188 27,657,772,250 70,125,391,152

274,717,029,305 36,921,548,824 17,375,655,099 10,626,856,257 25,013,640,718 21,992,806,781

96,258,868,134 50,240,460,428 21,938,204,609 46,842,252,319

33,793,649,038 93,923,216,729

217,113,308,1291,284,949,149,960

Share of net SA

19%2%5%

21%3%1%1%2%2%

7%4%2%4%

3%7%

17%100%




b) Sources of uncertainty in the estimation of future claim payments

Claims on general insurance contracts are payable on a claims-occurrence basis. The Company is liable for all insured events that occurred during the term of the contract. There are several variables that affect the amount and timing of cash flows from these contracts. These mainly relate to the inherent risks of the business activities carried out by individual contract holders and the risk management procedures they adopted. The estimated cost of claims includes direct expenses to be incurred in settling claims, net of the expected subrogation value and other recoveries.

The Company takes all reasonable steps to ensure that it has appropriate information regarding its claims exposures. However, given the uncertainty in establishing claims provisions, it is likely that the final outcome will prove to be different from the original liability established. The reserves held for these contracts comprises of a provision for IBNR, a provision for reported claims not yet paid and a provision for unearned premiums at the end of the reporting period.

c) Process used to decide on assumptions

General insurance contract liabilities: The discounted inflation adjusted chain ladder method (IABCL) was applied for reserving in respect of general insurance risk, with the exception of special risk policies reserved using the Expected Loss Ratio Approach. The discounted inflation adjusted chain ladder method (IABCL) method involves historical paid losses adjusted for inflation using the corresponding inflation index in each of the accident years to the year of valuation and then accumulated to their ultimate values for each accident year to obtain the projected outstanding claims. The projected outstanding claims are then further multiplied by the future inflation index from the year of valuation to the future.

The Expected Loss Ratio Approach was adopted for the special risk sub-category of general insurance risks due to the volume of data available being too small to be credible when using a statistical approach. Under this method, the ultimate claims is obtained by assuming loss ratio. Paid claims already emerged is then deducted for from the estimated ultimate claims.

The provision for outstanding claims, including IBNR, was determined for each line of business on both gross and net of reinsurance basis. A yearly cohort from year 2007 has been adopted in building the historical claims.

Inflation index6.6%

15.1%13.9%11.8%10.3%12.0%

8.0%8.3%9.6%

18.5%15.4%11.3%11.4%12.0%

Year20072008200920102011201220132014201520162017201820192020+

Accumulated Inflation Index319.2%293.2%241.6%199.9%168.3%143.2%117.2%101.1%

85.7%69.4%43.0%23.9%11.4%

See note 22.4 for claims development tables

Key assumptions

The methods assumes that future claims follow a regression pattern from the historical data. Hence payment patterns will be broadly similar in each accident year. Thus the proportionate increase in the known cumulative payments from one development year to the next is used to calculate the expected cumulative payments for the future development periods.

- An implicit assumption of the chain ladder is that weighted past average inflation will remain unchanged in to the future.- We assume gross claim amount includes all related claim expenses. If this is not the case, we will hold a separate reserve to cover claim expenses.- The UPR is calculated on the assumption that risk will occur evenly during the duration of the policy.- The BF method assumes past experience is not fully representative of the future.- Historical average loss ratio under gross Special Risk is 26% and 6.5% is the proportion of recoveries to ceded premiums, we have assumed loss ratio of 50% and 20% respectively.




Life insurance contract liabilities- Individual risk business comprises whole life assurances, endowment assurances and term assurances of descriptions, including mortgage protection and credit life. For all individual risk business the gross premium method of valuation was adopted. Reserves were calculated via a cashflow projection approach, taking into account future office premium, expenses and benefit payments, including payments on surrender where applicable. Future cashflows were discounted back to the valuation date at the valuation rate of interest.An unexpired premium reserve was included for Company life business, after allowing for acquisition expenses. Where required, an additional unexpired risk reserve is held for any inadequacies in the unexpired risk reserve for meeting claims in respect of the unexpired period. The claim rates underlying the determination of additional unexpired risk reserve were based on pooled historical scheme claims experience.

An allowance was made for incurred but not reported (IBNR) claims in company life to take care of delay in reporting claims. This was based on Chain Ladder method, where the company business was grouped into two classes - Public and Private Businesses. Historical claims were grouped into accident year cohorts-representing how they were paid after their accident year to form development triangles. For each accident year, paid claims were accumulated to the valuation date and projected into the future to obtain the expected ultimate claim arising for that year. This assumes the trends observed in the historical data will continue. The gross claim reserve is calculated as the difference between the estimated ultimate claims and the accumulated paid claims. For the later years where the cohorts are underdeveloped or has less than expected claims, the Bornheutter Ferguson (BF) method was used to estimate the ultimate claims. The appropriate loss ratio used in estimating the BF ultimate claim was the average of fully developed historical years.

Key assumptions

Material judgment is required in determining the liabilities and, in particular, in the choice of assumptions. Assumptions in use are based on past experience, current internal data, external market indices and benchmarks which reflect current observable market prices and other published information. Assumptions and prudent estimates are determined at the date of valuation and no credit is taken for possible beneficial effects of voluntary withdrawals. Assumptions are further evaluated on a continuous basis in order to ensure realistic and reasonable reserves are set aside to meet liabilities.




(i) Sensitivity analysis on insurance contract liabilities

The analysis which follows is performed for reasonably possible movements in key assumptions with all other assumptions held constant, and shows the impact on gross and net liabilities, profit before tax and equity. The correlation of assumptions will have a significant effect in determining the ultimate claims liabilities, but to demonstrate the impact due to changes in assumptions, the assumptions had to be changed on an individual basis.

It should be noted that movements in these assumptions are non-linear. Sensitivity information will also vary according to the current economic assumptions, mainly due to the impact of changes to both the intrinsic cost and time value of options and guarantees. When options and guarantees exist, they are the main reason for the asymmetry of sensitivities.

Sensitivities were not applied to the Reinsurance for individual life business as its value is immaterial. Also, Mortality sensitivity tests were applied in the opposite direction for the annuity business. These are as shown below:

Life insurance contract liabilities

N'000m

Investment Linked Plans - Fund Balance Investment Linked Plans - Risk Reserve Traditional Plans (excluding Annuity) Annuity Group DA Group Life – UPR Group Life – IBNR Other Group Risk Outstanding Claims Additional reserves Reinsurance Net liability

% Change in net liability

Summary

Individual Group Net liability

% change in liability

Base

17,088,550

167,328

3,884,533 220,436,034

9,707,662 1,687,347 1,308,642

25,693 2,516,571

34,212 (363,717)

256,492,853

-

Base

241,841,761 14,651,092

256,492,853

-

Interest rate +1%

17,088,550

164,517

3,796,798 209,436,964

9,707,662 1,687,347 1,308,642

25,588 2,516,571

34,212 (363,717)

245,403,133

-4.32%

Interest rate +1%

230,752,146 14,650,987

245,403,133

-4.32%

Interest rate -1%

17,088,550

170,294

3,984,655 232,574,882

9,707,662 1,687,347 1,308,642

25,800 2,516,571

34,212 (363,717)

268,734,898

4.77%

Interest rate -1%

254,083,698 14,651,199

268,734,898

4.77%

Expenses +10%

17,088,550

186,404

3,923,459220,856,608

9,707,6621,687,3471,308,642

26,7912,516,571

34,212(363,717)

256,013,981

0.19%

Expense +10%

242,320,33914,652,191

256,972,529

0.19%

Expense Inflation +2%

17,088,550

174,323

3,899,917 221,233,886

9,707,662 1,687,347 1,308,642

25,827 2,516,571

34,212 (363,717)

257,313,220

0.32%

Expense Inflation +1%242,661,994

14,651,227 257,313,220

0.32%

Expense Inflation -2%

17,088,550

161,036

3,870,827 219,805,915

9,707,662 1,687,347 1,308,642

25,559 2,516,571

34,212 (363,717)

255,842,604

-0.25%

Expense Inflation -1%241,191,646

14,650,959 255,842,604

-0.25%

Lapses +10%

17,088,550

167,328

3,860,078 220,436,034

9,707,662 1,687,347 1,308,642

25,616 2,516,571

34,212 (363,717)

256,468,323

-0.01%

Lapse +20%

241,817,307 14,651,016

256,468,323

Lapses -10%

17,088,550

167,328

3,910,781 220,436,034

9,707,662 1,687,347 1,308,642

25,770 2,516,571

34,212 (363,717)

256,519,179

-0.01%

Lapse -20%

241,868,010 14,651,169

256,519,179

-0.01%

Mortality +5%

17,088,550

168,658

3,932,730 221,625,508

9,707,662 1,687,347 1,308,642

26,322 2,516,571

34,212 (363,717)

257,732,484

0.48%

Mortality +1%

243,080,763 14,651,722

257,732,484

0.48%

Mortality -5%

17,088,550

166,003

3,835,817 219,276,667

9,707,662 1,687,347 1,308,642

25,079 2,516,571

34,212 (363,717)

255,282,832

-0.47%

Mortality -1%

240,632,354 14,650,478

255,282,832

-0.47%

---The mortality stress has been applied in the opposite direction for annuities. For example the 5% strengthening of the mortality assumption was modelled as 5% lighter mortality for annuitants.---All stresses were applied independently--- All stresses were applied independently

Expenses -10%

17,088,550

148,691

3,845,959220,015,460

9,707,6621,687,3471,308,642

24,6042,516,571

34,212(363,717)

256,013,981

-0.19%

Expense -10%

241,363,97814,650,003

256,013,981

-0.19%




Class of business

General AccidentEngineeringFireMarineMotorAgricBondSpecial RisksTotalAccount outstandingDifferencePercentage change

Base

1,057,128,163 500,873,684

2,240,883,588 1,269,657,002 1,450,113,088

209,634,812 642,662,511

50,647,006,401 58,017,959,249 44,723,650,216 13,294,309,033

5% Development Ratio

1,061,812,824 503,378,642

2,269,943,925 1,276,622,936 1,496,528,008

231,812,593 660,436,653

50,660,285,681 58,160,821,263 44,723,650,216 13,437,171,048

0.25%

-5% Development Ratio

1,053,181,098 497,898,549

2,206,574,244 1,259,867,172 1,406,816,108

187,457,031 634,110,480

50,632,168,918 57,878,073,600 44,723,650,216 13,154,423,382

-0.24%

1% Inflation Rate

1,066,341,345 504,708,048

2,251,942,195 1,276,558,078 1,463,866,741

209,634,812 648,502,665

50,819,762,915 58,241,316,800 44,723,650,216 13,517,666,584

0.39%

-1% Inflation Rate

1,047,981,571 497,051,131

2,229,864,210 1,262,772,120 1,436,421,950

209,634,812 636,824,666

50,475,232,953 57,795,783,413 44,723,650,216 13,072,133,197

-0.38%

1% Discount Rate

1,049,232,671 497,969,575

2,227,244,756 1,262,776,431 1,441,227,231

209,634,812 639,730,615

50,294,213,624 57,622,029,714 44,723,650,216 12,898,379,498

-0.68%

-1% Discount Rate

1,065,207,866 503,829,567

2,254,773,189 1,276,654,463 1,459,177,800

209,634,812 645,635,551

51,007,265,705 58,422,178,954 44,723,650,216 13,698,528,739

0.70%

(b) General insurance contract liabilities

109ANNUAL REPORT& ACCOUNTS 2019



The key assumptions to which the estimation of liabilities is particularly sensitive to are as follows:

Mortality and morbidity rates

Our assumptions are based on standard industry and national tables, according to the type of contract written . They are adjusted when appropriate to reflect historical experience of the portfolio.

An appropriate, but not excessive prudent allowance is made for expected future improvements.

An increase in rates on products other than life annuities will lead to a larger number of expected claims (and claims could occur sooner than anticipated), which will increase the reserve and reduce reported profits for the shareholders. For Life annuities, the converse will be true.

Longevity

Our assumptions are based on standard industry and national tables, according to the type of contract written . They are adjusted when appropriate to reflect historical experience of the portfolio.

An appropriate, but not excessive prudent allowance is made for expected future improvements.

An increase in longevity rates will lead to an increase in the expected number of annuity payments to be made, which will increase the reserve and reduce reported profits for the shareholders.

Investment return

The actual yield curve is derived from the spot rates of the FGN fixed income securities as provided by FMDQ. These rates are based on current market returns as well as expectations about future economic and financial developments.

An increase in investment return would lead to a reduction in reserves and an increase in reported profits for the shareholders.

Expenses

Operating expense assumption reflects the projected costs of maintaining and servicing in–force policies and associated overhead expenses. The current level of expenses is taken as an appropriate expense base, adjusted for expected expense inflation if appropriate.

An increase in the level of expenses would result in an increase in expected expenditure thereby reducing reported profits for the shareholders.

Lapses and surrender rates

Lapses relate to the termination of risk policies due to non–payment of premiums. Surrenders relate to the voluntary termination of policies by policyholders. Policy termination assumptions are determined using statistical measures based on the Company’s experience and vary by product type.

Usually, an increase in lapse rates early in the life of the policy would tend to reduce profits for shareholders to the unrecouped initial expenses.

Life insurance liabilities are determined as the sum of the discounted value of the expected future benefits and future administration expenses directly related to the contract, less the discounted value of the expected future premiums from the contract. Discount rates are based on the risk free rate at different tenors plus an adjustment for risk.

A decrease in the discount rate will increase the value of the insurance liability and therefore reduce profits for the shareholders with the exception of a perfectly matched annuity portfolio where both assets and liabilities will increase by the same magnitude.

The following table outlines the general form of terms and conditions that apply to contracts sold in each category of business, and the nature of the risk incurred by the Company.




FeaturesName

Designed to help with the cost of retirement by providing a guaranteed income for the rest of the policyholder’s life. The annual payments can be made monthly, quarterly or annually.

During the stated guarantee period, the annuity payments will continue whether the annuitant is alive or not. If the annuitant dies before the end of the guarantee period the present value of the outstanding payment due within the guarantee period shall be payable in a lump sum to the name beneficiary or to the estate of the annuitant under probate.

Policyholder buys into this product and pays a lump-sum premium. The policyholder in turn receives pre-defined payments throughout the term of the policy. If the policyholder dies within the annuity period, the balance in the annuity is payable to the beneficiary, but if he survives the annuitant (policy holder) gets the annuity.

The policy covers payment of fees for the named beneficiary children or ward whilst in school or college in the event of death, total permanent disablement (optional cover) or critical illness (optional cover) of the named parent and/or Policyholder. The policy has a minimum term of one year and has options for Level Benefit and Decereasing benefit.

The benefit shall be payable to the named school through the named legal guardian for the unexpired school years as stated in the schedule.

A whole Life Assurance product that pays sum assured on death of policyholder or any of the parents or spouse insured. - Policy terminates on first death. - Additonal grocery voucher of N25,000 on death of any member and a family support benefit payable for 6 months in installments of N20,000 on death of policyholder.

A Whole Life Assurance that pays sum assured on death of each of the members covered by the policy

Policy terminates on the death of the policyholder.

Additonal grocery voucher of N25,000 on death of any member and a family support benefit of N20,000 payable for 6 months on death of policyholder.

Sum assured is payable in the event of death of a member while in the service of the employer and before retirement.

Refund of premium: in the event that the life assured is terminated before the normal retirement date from any cause other than death, the Company will pay to the employer a rebate in respect of the relative premium proportionate to the unexpired portion of the then current year of assurance.

Premium rates are annually renewable.

Leadway has the right to charge extra premiums on medical grounds.

Credit Life Protection that pays outstanding loan amount on death. There are disability and job loss riders.

Credit Life Protection that pays outstanding loan amount on Death. It has PTD and Job Loss Covers.

The Term Assurance product pays out a lump sum if death (or any the insured event) occurs during the period of cover.

Credit Life Protection that pays outstanding loan amount on death. It also has optional CIC, 12 months Job loss and PTD riders.

Credit Life Protection that pays outstanding loan amount on Death. It has PTD , Critical Illness and 6 months Job Loss cover.



Credit Life Protection that pays outstanding loan amount on Death. It has PTD and 6 months Job Loss cover

1 Leadway Immediate Annuity Plan

2 Annuity certain

3 Education Protection Plan

4 Family Benefit Plan

5 Family Benefit Plan Plus

6 Company life

7 Credit Life

8 Personal Loan Protection Plan

9 Term Assurance

10 Mortgage Protection Plan

11 REN Credit Life

12 RSL Credit Life Insurance

13 Vehicle Loan Protection Plan

14 Heritage Credit Life Protection




FeaturesName

Credit Life Protection that pays outstanding loan amount on Death. It has PTD and 3 months Job Loss cover.

Credit Life Protection that pays outstanding loan amount on Death. It has PTD, Critical Illness and 3 months Job Loss cover.

Credit Life Protection that pays outstanding loan amount on Death and PTD. It has 6 months job loss cover.

Credit Life Protection that pays outstanding loan amount on death, critical illness and Permanent Disablility.Outstanding loan less terminal benefit is paid on job loss. Minimum term is 1 year.

Credit Life Protection that pays outstanding loan amount on Death, critical illness and Permanent Total Disablility.

Credit Life Protection that pays outstanding loan amount on Death.

Credit Life Protection that pays outstanding loan amount on Death. It has PTD and 6 months job loss cover.

Credit Life Protection that pays outstanding loan amount on Death or named Critical Illness.

Credit Life Protection that pays outstanding loan amount on death.

Credit Life Protection that pays outstanding loan amount on Death and PTD. It has 6 months job loss cover.

Credit Life Protection that pays outstanding loan amount with one month Job loss.

Credit Life Protection that pays outstanding loan amount on Death or Critical Illness or PTD. It has 6 months Job Loss also.

Credit Life Protection that pays outstanding loan amount on Death. It has PTD or 12 months Job Loss cover.

One year renewable term assurance with sum assurance payable on death.

PTD benefit is payable if specified by the policyholder.

Payment of Sum Assured (Target amount) upon Death or Maturity, whichever comes earlier. Policy terminates after payment of any benefit.

Critical Illness, Accidental, Total and Permanent disability are optional riders and attract additional premium.

Payment of Sum Assured (Target amount) upon Death or Maturity, whichever comes earlier. Policy terminates after payment of any benefit.

Critical Illness, Accidental, Total and Permanent disability are optional riders and attract additional premium.

Leadway Lifestyle Protection is a life assurance plan that provides you with a life cover and also optionally protects you against Critical Illness, Permanent Total Disability and Job Loss.

The product pays a sum assured on occurrence of the insured risks within the policy term. The minimum policy term is one year.

For having consecutive claim-free years, you receive a cash-back payment which is a rate on the premiums paid in the year.

15 BORSTAL MFB Credit LIfe Protection

16 CRUTECH MFB Credit LIfe Protection

17 EcoBank Credit Life Protection

18 M I C R O C R E D M F B C r e d i t L I f e Protection

19 WEMA Credit Protection

20 Heritage Personal Protection Plan

21 Small and Medium Enterprise

22 Credit Card Protection

23 GTB Credit Life protection

24 Personal Credit Loan

25 Term Loan Protection Plan

26 Company Credit Life

27 Company Mortgage Protection

28 Private Health Plan

29 Education Target Plan

30 Leadway Target Plan

31 Leadway Lifestyle Protection Plan




Investment contract liabilities

The following table outlines the deposit based (DA) products)

Name

1 Deferred annuity plan

Name

2 Leadway Investment Plan

3 Personal Savings Plan

4 Education Target Plan

5 Leadway Savings Plan

6 Custodian

7 Individual Deposit Admin

8 Pearl

Features

This product meets protection and savings needs of a policyholder towards funding an annuity pension at retirement.

Contributions from policy holder are to be invested in a fund. The accumulated return on the investment as well as the invested amount is due on maturity.

Payment of Sum Assured + Savings account balance upon death.

Minimum policy term is 3 years.

On choosing critical illness and/or PTD riders, payment of sum assured on the riders + Savings account balance in the event of claim.

Features

Single Premium endowment assurance that pays the higher of "Invested single premium plus an additional 20% of invested Single Premium" and "Accumulated value of single premium" on death or maturity. The 20% of Single Premium is subject to a maximum death risk benefit of N5 million. On Maturity, the guaranted accumulated value of the premium is paid.

A guaranteed amount (known at inception) is paid upon maturity of the investment.

Policyholders can avail additional Life Cover, Critical illness and PTD cover.

Deposit Based Savings. Death benefit is sum assured + savings account balance upon death.

Payment of Sum Assured + Savings account balance upon death, Minimum policy term is 3 years, on choosing critical illness and/or PTD riders, payment of sum assured on the riders.

Payment of Sum Assured + Savings account balance upon death.

At maturity, account deposit balance is paid.

On choosing critical illness and/or PTD riders, payment of sum assured on the riders + Savings account balance in the event of claim.

Deposit based savings, Risk component is the outstanding premium payable. It is thus a decreasing term assurance with start sum assured equal to contracted total premium.

Risk benefit is funded by the Nil and partial allocations on the premiums.

The structure for Nil and Partial allocation. Year 1- 75% allocation.Year 2 to year 4 - 90% allocation.Year 6 afterwards- 97% allocation.The product is running off.

The life cover granted during the policy shall be future unpaid premiums up to cessation date provided the policy is in force. This policy has nil allocation between 4 months to 8 months during which the overhead cost of the Company are met.If term assurance is not opted for, 100% premium will be transferred to the policyholder's account for investment purpose.

When policyholder dies, the balance in the policyholder's account plus total premium due after death and before maturity is payable to the beneficiary. If the policyholder surrenders or terminates the policy; the balance in the policyholder's account is payable. On maturity, accumulated balance in the policy holder's account is paid or instalment payment of the maturity benefit through the period of child's education.

Deposit based savings. No risk cover.The product is running off. No new business.




Guaranteed interest (renewable annually) on all deposits received from employer. Contribution to the fund can be on individual basis or on pool basis. If a member leaves the service of the employer before normal retirement date, accrued benefit up to withdrawal date in respect of employee's and employer's contribution shall be paid to the member.

Pension option:

In the event of the benefit becoming payable; it could be applied in whole or in part to secure a Pension. This pension is payable at equal intervals to the member until he dies , however the payment is guaranteed for a predefined period. If a member leaves the service of the employer before normal retirement date, accrued benefit up to withdrawal date in respect of employee's and employer's contribution shall be paid to the member. If a member dies before the expiration of the guaranteed period a cash sum shall be payable.

9 Company Deposit Admin




4 Critical accounting estimates and judgement.The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates and judgements are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.These disclosures supplement the commentary on enterprise risk management (see note 3). Estimates where management has applied judgements are:(a) Ultimate liability arising from claims made under insurance contracts(b) Determination of fair value of level 3 financial instruments (unquoted equities)(c) Assessment of impairment of goodwill on acquired subsidiaries

(a) The ultimate liability arising from claims made under insurance contracts The estimation of the ultimate liability arising from claims made under insurance contracts is one of the Company’s most critical accounting estimate. There are several sources of uncertainty that need to be considered in the estimate of the liability that the Company will ultimately pay for such claims.The ultimate cost of outstanding claims is estimated by using a standard actuarial claims projection techniques called the Basic Chain Ladder (BCL).The main assumption underlying these technique is that the Company’s past claims development experience can be used to project future claims development and hence ultimate claims costs. As such, this method extrapolates the development of paid and incurred losses, average costs per claim and claim numbers based on the observed development of earlier years and expected loss ratios. Historical claims development is mainly analysed by accident years and the assumptions used are those implicit in the historical claims development data on which the projections are based. Additional qualitative judgment is used to assess the extent to which past trends may not apply in future, (for example to reflect one-off occurrences, changes in external or market factors such as public attitudes to claiming, economic conditions, levels of claims, inflation, judicial decisions and legislation, as well as internal factors such as portfolio mix, policy features and claims handling procedures) in order to arrive at the estimated ultimate cost of claims that present the likely outcome from the range of possible outcomes, taking account of all the uncertainties involved.

See note 3.4 (i) for sensitivity analysis on insurance contract liabilities.

(b) Determination of fair value of level 3 financial instruments (Unquoted equities)Investments in unquoted equity securities that are classified as equity securities at fair value available for sale financial instrument in line with the accounting policies as set out in note 2.6 of the statement of significant accounting policies. See note 3.4 for the valuation methodology for the determining the fair value.

(c) Assessment of impairment of goodwill on acquired subsidiaryLeadway Assurance owns 99.9% of the shareholdings of Leadway Vie, goodwill was recognised upon acquisition of the subsidiary. The goodwill amount was tested for impairment using discounted cash flow valuation method at year end. Projected cash flows were discounted to present value using a discount rate of 11.1%, a first year revenue growth of 100% and subsequent average revenue growth rate of 7.7% over a period of 4 years. The Company determined the appropriate discount rate at the end of the reporting period. See note 17 for further details.




5 Non current assets distributed and discontinued operationsPursuant to the approval of the shareholders at the Annual General Meeting of Leadway Assurance Company Limited held in May 2018, the Company distributed all of its holdings in Leadway Pensure PFA Limited; Leadway Hotels Limited, Leadway Capital & Trusts Limited and Leadway Properties & Investments Limited to the shareholders of the company as at that date and this was effected immediately.

The approval to distribute Non-insurance subsidiaries and the actual distribution was concluded in the same year, Consequently all the related assets and liabilities relating to the subsidiaries above have been derecognised in these financial statements. An analysis of the residual impact of this "discontinued operations" is summarised below:

a. Analysis of the result of discontinued operations

RevenueExpensesProfit before tax of discontinued operationsTaxProfit for the year from discontinued operations

b. Gain on Assets Distributed and Loss on Discontinued OperationsThe loss/gain on distribution of the company's Non-current assets is analysed below:

- Carrying value of assets- Fair value remeasurement adjustment

Fair value of assets distributedLess:Net assets of subsidiaries distributedGoodwill on subsidiaries disposedProfit recorded by the subsidiaries during the period

Reversal of fair value reserves Reversal of treasury sharesCost of investments in subsidiaries disposedNCI on subsidiaries disposed

(Loss)/ Gain on Assets Distributed

c. Cashflow (used in)/from discontinuing operations

Net cash used in operating activities Net cash (used in)/from investing activities Net cash used in financing activities

Company31-Dec-19

-----

Company31-Dec-19

--

-

-

-

Company31-Dec-19

---

Company31-Dec-18

-----

Company31-Dec-18

3,637,495 2,931,805

6,569,300

3,637,495

2,931,805

Company31-Dec-18

(216,539)(1,243,315)

-




6 Cash and cash equivalents

Cash on handCash at bankTenored deposits

Tenored deposits are made up of placements with banks and other financial institutions with less than 3 months maturity from the date of acquisition. The carrying amounts disclosed above reasonably approximates fair value at the reporting date.

7 Trade receivables(a) Trade receivable comprises the following:

General Insurance receivablesLife Insurance receivables

Insurance receivable is analysed as follows:Due from Contract holdersDue from BrokersDue from AgentsDue from Insurance companies

Current

(b) The age analysis of gross insurance receivables as at the end of the year is as follows:

Analysis of premium debtors in days0 - 30 days

8 Investment securities:T vestment securities are summarised below by measurement category in the table below:he Company's in

Financial assets at fair value through profit or loss (see note 8.1 below)Available for sale (see note 8.2 below)

CurrentNon Current

Company31-Dec-19

5,8865,422,978

20,781,743

26,210,607

Company31-Dec-18

3,2415,641,627

27,333,436

32,978,304

Company31-Dec-19

97,595 4,864

102,459

- 102,459

--

102,459

102,459

Company31-Dec-18

381,436 14,149

395,585

-395,585

- -

395,585

395,585

Company31-Dec-19

238,425,827

62,200,278300,626,105

3,370,650 297,255,455 300,626,105

Company31-Dec-18

156,009,761

53,279,959209,289,720

6,286,937203,002,783209,289,720

Company31-Dec-19

102,459

Company31-Dec-18

395,585




The assets comprised in each of the categories above are detailed in the tables below:

8.1 Financial assets at fair value through profit or loss

Designated at fair value through profit or loss

Debt securities: - Listed

Held for tradingEquity securities:- Listed

Total financial assets at fair value through profit or loss

CurrentNon Current

Movement in financial assets at fair value through profit or loss

Opening balanceAdditionsDisposalsDistribution of subsidiariesAccrued Interest on bondsInterest receivedFair value changesClosing balance

8.2 Available for sale financial assets

Certain unquoted investment securities listed below for which fair values could not be reliably estimated have been carried at cost less impairment. There are no active markets for these equity instruments, fair value information are therefore not available making it impracticable for the company to fair value these investments. The company does not intend to dispose any of these investments within the next financial year.

Equity securities at fair value - Listed- Unlisted (see note a(I) below)Equity securities at cost - Unlisted (see note a(ii) below)Debt securities: - Listed

Less: allowance for impairment loss (see note (b) below)Total available for sale financial assets

CurrentNon Current

Company31-Dec-19

235,720,995

2,704,832

238,425,827

2,704,832235,720,995238,425,827

Company31-Dec-19

156,009,76192,148,721

(43,953,156)-

24,944,542(24,374,217)

33,650,175238,425,827

Company31-Dec-19

15,487,8645,706,378

480,000

41,030,99662,705,238

(504,960)

62,200,278

665,81861,534,46062,200,278

Company31-Dec-18

153,254,493

2,755,268

156,009,761

2,722,267153,287,494156,009,761

Company31-Dec-18

129,997,62753,566,530

(15,592,212)-

19,638,174(19,379,727)(12,220,631)156,009,761

Company31-Dec-18

10,873,8268,144,914

1,559,679

33,206,50053,784,919

(504,960)

53,279,959

3,564,67049,715,28953,279,959




a (i) Analysis of unlisted available for sale financial assets:Company Company

31-Dec-19 31-Dec-18At fair valueAfrica Finance Corporation 1,186,757 1,058,169

African Reinsurance Company Limited 1,496,056 1,678,105Capital Bancorp 156,197 153,098 Food Concept Limited 7,000 6,600 Lekky Budget Limited 37,038 33,945 Mainstreet Technologies 339,285 151,999

310,969 221,405 MTN (reclassified to listed equities) - 1,187,962Oakwood Park Limited - 33,593 West African Milk Company Limited 49,514 67,072 JDI investment company Ltd 23,866 47,319 Nigeria Liability Insurance Pool 94,180 74,488

104,603 56,159

Central Security Clearing System - 3,375,000Verod Capital Management Ltd (see a(ii) below) 1,900,912

A 5,706,378 8,144,914

Companya (ii) At cost

MotorWays Assets Limited 480,000 480,000- 1,079,679

B 480,000 1,559,679

Less: Specific allowance for impairment (unquoted equity securities) C (504,960) (504,960)Total unlisted equities (A+B +C) 5,681,418 9,199,633

Verod Capital ManagementOpening balance 1,079,679 - Addition 465,142 - Fair value adjustment 356,091 - Closing balance 1,900,912 -

(b) The movement in the allowance for impairment losses on available for sale unquoted equities is as follows:

Company Company31-Dec-19 31-Dec-18

Balance, beginning of year 504,960 504,960Charge for the year - - Write off - -

Balance, end of year 504,960 504,960

(c) Movement in Available for sale assets:Company Company

31-Dec-19 31-Dec-18

Opening balance 53,279,959 17,007,767Additions 43,766,851 11,649,449Reclasification to AFS from HTM - 27,547,995Reclasification from AFS to Deposit for share** (641,462) - Disposals (35,732,013) (620,942)Distribution of subsidiaries - Acquired from subsidiary - - Fair value changes 1,108,232 (2,745,484)Exchange gains (6,158) 441,173 Interest received (3,228,577) - Impairment - - Accrued Interest on bonds & treasury bill 3,929,282 - Closing balance 62,476,114 53,279,959

Energy and Allied Insurance pool of Nigeria

Lagos Building Investment Company Ltd

Verod Capital Management Ltd

Fair value movement

**A Togo Bond was reclassified from AFS to Deposit for Shares during the year as part of Capital Injection to our Subsidiary in Cote d'Ivoire. The transfer was completed in January 2020




9

(a)

(b)

( c )

(i)

(ii)

Reinsurance assets

Prepaid reinsurance

Due from reinsurers

Prepaid reinsurance - General businessPrepaid reinsurance - Life Business

See note (i) below for movement

See note (ii) below for movement

Due from reinsurers General businessDue from reinsurers Life business

Total Reinsurance Assets

CurrentNon-current

The movement in prepaid reinsurance is as follows:

Balance, beginning of the yearReinsurance Ceeded during the yearReinsurance Expense during the year (see note 27)


General Insurance

Balance, beginning of the yearReinsurance Ceeded during the yearReinsurance Expense during the year


Life

Balance, beginning of the yearReinsurance Ceeded during the yearReinsurance Expense during the year


The movement in reinsurance recoverable is as follows:

Balance, beginning of the yearDecrease/increase during the year (see note 29)Balance, end of year

General Insurance


Reinsurance recoverable General business

Reinsurance recoverable

Reinsurance recoverable Life business

Company31-Dec-19

3,193,76635,352,553

492,13539,038,453

Company31-Dec-19

3,090,180103,585

3,193,766

35,092,421

260,13135,352,553

492,135-

492,135

39,038,453

39,038,453-

39,038,453

Company31-Dec-19

3,127,72518,022,240

(17,956,199)

3,193,766

Company 31-Dec-192,930,656

17,553,188(17,393,664)

3,090,180

Company 31-Dec-19

197,069469,052

(562,535)

103,585

Company31-Dec-1940,492,413(5,139,860)35,352,553

39,665,977(4,573,556)35,092,421

Company31-Dec-18

3,127,72540,492,413

68,75043,688,887

Company31-Dec-18

2,930,656197,069

3,127,725

39,665,977

826,43540,492,413

39,73829,01268,750

43,688,887

43,688,887-

43,688,887

Company31-Dec-18

3,784,31915,958,761

(16,615,355)

3,127,725

Company 31-Dec-183,321,651

15,099,934(15,490,929)

2,930,656

Company 31-Dec-18

462,668858,827

(1,124,426)

197,069

Company31-Dec-18

31,404,7419,087,671

40,492,413

30,598,2619,067,716

39,665,977




Life


10 Deferred acquisition costs

MotorFireGeneral accidentAgricMarineBondEngineering and Special Risk

i. The movement in deferred acquisition costs is as follows:

Balance, beginning of yearCost incurred during the yearAmortisation for the year (see( ii ) below)


ii. Analysis of amortization for the year is as follows:

Acquisition cost during the year Increase/(decrease) in deferred acquisition cost during the year


Current

11 Other receivables and prepayments

Financial assets:Accrued interest on statutory depositsRental income receivableDividend receivableReceivable from Leadway Holdco & Leadway VIE (see note "I")

Non financial assets:Prepayment (see note "ii" below)Deposit for shares (see note "a" below)Receivable on Claims settled on behalf of Co - InsurersDeposit for purchase of foreign currencyDeposit for purchase of AssetsSundry debtors (See note "iii" below)

Gross other receivables

Less: Impairment allowance on:

Financial assetRental income receivableDividend receivableReceivable from related parties

Non-Financial Assets Deposit for shares Sundry debtors

Deferred acquisition costs represent commissions on unearned premium relating to the unexpired period of risks and comprise:

Total Impairment losses on Financial assets

Total Impairment losses on Non- Financial assets

806,48019,955

826,435

Company31-Dec-18

141,793161,207

61,94132,872

129,0443,334

320,878851,069

Company31-Dec-18

548,7971,783,496

(1,481,224)

851,069

Company31-Dec-181,783,496(302,272)

1,481,224

851,069

851,069

Company31-Dec-18

11,574539,594232,784

32,440

816,392

151,980302,000111,628104,027

20,413147,958838,006

1,654,398

(64,851)(27,928)

-(92,779)

(22,000)(122,017)(144,017)

826,435(566,304)

260,131

Company31-Dec-19

168,875159,882

79,74422,554

146,1584,834

243,320825,367

Company31-Dec-19

851,0692,827,756

(2,853,458)

825,367

Company31-Dec-192,827,756

25,702

2,853,458

825,367

825,367

Company31-Dec-19

14,439490,278217,793130,338

852,848

185,128943,462103,640

--

284,2791,516,509

2,369,357

(64,851)(27,928)

-(92,779)

(22,000)(122,017)(144,017)




Net other receivables

CurrentNon Current

i. The amount due from Leadway Holdco & Subdiaries includes Technical Service fees due from Holdco. ii. Prepayment relates to our advance payments on expenses like rent, advertisement and others

a.

Company's namei FBS Reinsurance Limited

ii MV Exchangeiii Leadway Vie (reclassified from Financial Assets)

Total

The movement in deposit for shares is as follows:

Balance, beginning of yearAdditionTransfer to Investment in subsidiary upon allotment of Leadway Vie's equityExpenses incurred on Acquisition of subsidiaryRefund of unutilized depositTransfer to Equity investments on allotment of sharesBalance, end of year

b. The movement in allowance for impairment of other receivable is as follows:

Balance, beginning of yearCharge for the year (see note 36)Charge for the year on discontinued operationsDistribution of subsidiaryWrite offBalance, end of year

12 Loans and Advances

GrossCommercial loans Staff loansAgency loan Loan to policy holdersAdvance under finance lease

CurrentNon Current

Net Loans and advances

The addition to deposit represents the carrying value of the Togo bond which was transferred to Leadway Vie as additional investment but was classified as deposit for shares as at year end pending the issue of shares.

Collective Impairment - Loans

Deposit for shares relates to payments made for the acquisition of shares in unquoted companies which had not been allotted as at 31 December 2019. Detail is shown below.

Total Impairment on Financial and Non Financial Assets

iii. Sundry Debtors represents claims due from co-insurers and payment due from Asset Management Company on our investment application.

- Policy holders loans

Specific Impairment allowance on: - Commercial loans - Staff Loans - Agency loans - Mortgage loan

Underwriting of riskE- commerce

31-Dec-19280,000

22,000641,462

943,462

(236,796)

1,417,602

1,373,58844,014

1,417,602

Company31-Dec-18

2,716,198-

(2,153,425)

(14,351)(246,422)

-302,000

Company31-Dec-18

236,796

--

236,796

Company31-Dec-18

1,314,82287,82433,270

310,656-

1,746,572

778,835967,737

1,746,572

(283,933)(533)

(1,720)-

(22,656)

(42,166)(351,008)

1,395,564

(236,796)

2,132,561

2,118,12214,439

2,132,561

Company31-Dec-19

302,000641,462

-

---

943,462

Company31-Dec-19

236,796-

--

236,796

Company31-Dec-19

1,229,74470,48747,430

411,591-

1,759,252

643,5741,115,6781,759,252

(288,992)(660)

(1,731)-

(33,371)

(31,703)(356,457)

1,402,795

Nature of business31-Dec-18280,000

22,000-

302,000




Company31-Dec-19

351,008

(2,034)185

2227,077

-

-

---

5,450

356,457

Company31-Dec-19

1,395,564 508,760

(616,160) 162,304

- (5,450)

(42,222) -

1,402,795

Company31-Dec-18

373,789

(34,371)486

98010,125

-

-

---

(22,781)

351,008

Company31-Dec-18

1,065,407 853,120 (630,072) 154,337 (70,009) 22,781

- 1,395,564

(i) The movement in allowance for impairment of loans is as follows:

Balance, beginning of year (a)

Charge/ (credit) for the year : (see note 36)

Mortgage loans

Charge to discontinued operationsWrite off :

Subtotal (b)

Balance, end of year (a+b)

(ii) Movement in loans and advances is as follows:

Balance beginning of yearAdditional loans grantedLoan repayment receivedAccrued interestsInterests receivedImpairment writeback/ (charge)Reclassification to bad debt

Balance end of year

- Policy holders loans

- Commercial loans - Staff Loans

- Agency loans - Policy holders loansAdvance under finance lease

- Staff Loans - Agency loans

Derecognition of distributed subsidiaries

Derecognition of distributed subsidiaries

Collective impairment was recorded for all loans and advances which are not specifically impaired in recognition of the credit risk inherent in all loans




(i)Fair values of land and buildings

On a determined basis, the Company engages the services of external, independent and qualified valuers to determine the fair value of the company's land and buildings. As at 31 December

2019, the fair values of the land and buildings have been determined by Diya Fatimilehin & Co., Estate Surveyor and Valuers (FRC/2013/NIESV/00000002773). See note 13.4b for the

analysis of the fair valuation method used for land and building.

Consequent to the revaluation of the Company's land and buildings at 31 December 2019, the accumulated depreciation at that date was eliminated against the gross carrying amount of the

properties and the net amount restated to the revalued amount.

(ii)The Company had no capital commitments as at the balance sheet date (31 December 2019: Nil).

(iii)No borrowing cost was capitalised as borrowing liability does not relate to purchase of property and equipment.

(iv)The company did not recognise any lease liability for the period as management has determined that there is no economic incentive that will significantly influence or reasonably ascertain

renewals of any of it's leased rental properties

Company - 2019

Cost or valuationBalance, beginning of year

Revaluation surplus/(deficit)

Reclassification to investment

Reclassification from investment

Reversal of accumulated depreciation due to revaluation Balance, end of year

Accumulated depreciationBalance, beginning of yearCharge for the yearReversal of accumulated depreciation due to revaluation


Net book value end of year

Net book value beginning of year

Land

518,692-

10,231

-

-

-528,923

--

--

-

528,923

518,692

Building

1,738,075

51,178

-

-

(41,971)1,747,282

-41,971

(41,971)-

-

1,747,282

1,738,075

Office equipment

607,15460,984

-

-

-(19,937)

648,200

533,22934,894

-(19,937)

548,186

100,014

73,925

Computer equipment

1,210,85762,187

-

-

-(502)

1,272,542

1,031,020

-(120)

1,129,287

143,254

179,837

Furniture & fittings

531,99416,700

-

-

--

548,694

506,95713,507

--

520,464

28,230

25,037

Motor vehicles

1,372,083281,833

-

-

-(18,012)

1,635,904

949,690203,861

-(8,441)

1,145,110

490,794

422,393

Capital Work In Progress

470,136777,493

-

-

-

-

1,247,629

-

-

1,247,629

Total

6,448,9911,390,236

61,409

-

--

(38,451)

(41,971)7,820,213

3,020,896457,721

(41,971)(28,499)

3,408,147

4,412,066

3,428,095

Right of Asset Use

-191,040

191,040

65,099

65,099

125,941

13.2

Additions

property

propertyWrite offDisposals

Disposals




13.4 Company - 2018

Cost or valuationBalance, Beginning of yearAdditionsRevaluation surplus/(deficit)Reclassification to investment prReclassification from investment propertyWrite offDisposals

Reversal of accumulated depreciation due to revaluationBalance, end of year

Accumulated depreciationBalance, beginning of yearCharge for the year

Reversal of accumulated depreciation due to revaluationDisposals


Net book value end of year

Net book value beginning of year

Land

912,209

-10,116

(393,633)

-(10,000)

-518,692

--

-

--

--

518,629

912,209

Building

2,283,048 -

81,660 (425,712)

(137,780)

(63,141)1,738,075

63,141

(63,141)-

-

1,738,075

2,283,048 9

Office equipment

566,27140,883

--

--

607,154

500,81932,410

-

533,229

73,925

65,452

Computer equipment

1,000,536210,321

--

--

1,210,857

924,084106,936

-

1,031,020

179,837

76,452

Furniture & fittings

524,2347,760

--

--

531,994

487,19219,765

506,957

25,037

37,042

Motor vehicles

1,260,388156,727

-(45,032)

1,372,083

805,652175,580

(31,542)

949,690

422,393

454,736

----

470,136

-

470,136

470,136

Total

6,546,686415,691

91,776(819,345)

470,136-

(192,812)

(63,141)6,448,991

2,717,747397,832

63,141(31,542)

3,020,896

3,428,095

3,828,939

(b) Non financial instruments measured at fair value

The following table sets out fair values of non financial instruments measured at fair value and analyses them by level in the fair value hierarchy into which each fair value measurement is categorised




All amounts are in thousands of Naira unless otherwise stated AssetsProperty and equipment- Land- Building

Total

Level 1

--

-

Company

31 December 2019

Level 2

528,9231,747,282

2,276,205

Total

528,9231,747,282

2,276,205

Level 3

-

All amounts are in thousands of Naira unless otherwise stated AssetsProperty and equipment- Land- Building

Total

Level 1

--

-

Company

31 December 2018

Level 2

518,6921,738,075

2,256,767

Total

518,6921,738,075

2,256,767

Level 3

-


Valuation techniques used to derive level 2 fair valuesLevel 2 fair values of land and buildings have been derived using the market valuation approach. Sales prices of comparable land and buildings in close proximity are adjusted for differences in key attributes such as property size and age.




14 Investment properties

Office property Residential property

Non Current

(a) The movement in investment properties during the year is shown below:

Balance, beginning of the year Reclassification to Property & Equipment Reclassification from Property & Equipment Transfer from other assets Acquisition from loan customer Additions during the year Acquisition during the year through newly acquired subsidiaries Fair value gain (see note 32) Disposals by subsidiary As at end of the year The analysis of investment properties is as follows:

Thomas Wyatt House ** (See note "c" below) Cadastral Property, Abuja Bedwell, Ikoyi I George Street Ikoyi Property ** Ozumba Mbadiwe Property Abeokuta property - Oke Ilewo Enugu Landed property Aerodrome Road, Apapa ** Warehouse Road Apapa ** Onike Road, Sabo Yaba ** Alfred Rewane Road (Marble House) ** Funsho Williams Av. - Old Corporate Office Plot 802 Cadastral Zone Bo2, Durumi Sangotedo scheme, Lekki sub-region Cocody Besiko - Cote de voire Others

Company31-Dec-19

14,061,9783,137,046

17,199,024

17,199,024

Company31-Dec-19

16,414,443----

576,704-

207,877-

17,199,024

Company31-Dec-19

1,441,9332,842,9981,787,721

878,1281,160,916

140,00452,107

240,770431,729183,188

6,924,648835,796114,254164,832

--

17,199,024

Company31-Dec-18

12,469,0913,945,352

16,414,443

16,414,443

Company31-Dec-18

14,963,765(470,136)

819,345210,838

49,162430,509

-410,960

-16,414,443

Company31-Dec-18

1,438,1612,812,3291,786,664

877,6871,160,516

140,00446,160

215,500425,350179,300

6,237,935831,637100,000163,200

-16,414,443

(b) The Company's investment properties are held for the purpose of capital appreciation and rental income generation under perating lease arrangements (All leases are cancellable). The Company's investment properties were revalued by Diya Fatimilehin & Co, Estate Surveyors and Valuers (FRC/2013/NIESV/00000002773) using the Comparative approach method of valuation to arrive at the open market value as at 31 December 2019. Fair value gains have been recognized in the income statement in line with the fair value model of IAS 40. Rental income on investment property included in the statement of comprehensive income for the year is N761.251million (2018: N933.62 million); and N754.36 million (2018: N928.1 million) for company and company respectively. The titles of most of the goup's properties are fully perfected.




(d) DESCRIPTION

THOMAS WYATT HOUSE ABUJA CADASTRAL OFFICE BEDWELL ROAD IKOYI GEORGE STR-AMCON (Undeveloped Landed property) OZUMBA MBADIWE-AMCON (Undeveloped Landed property) ABEOKUTA PROPERTY (Undeveloped Landed property) ENUGU LANDED PROPERTY (Undeveloped Landed property) Property in Apapa -Aerodrome road Property in Apapa - Warehouse road No. 2, Onike Road (4A, Industrial Avenue), Sabo, Yaba, Lagos. Marble House Ikoyi FUNSHO WILLIAMS AVENUE PROPERTY ASO 1-Plot 802, Cadastral Zone B02, Durumi Distric ASO 2- Sangotedo scheme, Lekki sub - region, Eti o Total

BAL. B/F

1,438,1612,812,3291,786,664

877,6871,160,516

140,00446,160

215,500425,350179,300

6,237,935831,637100,000163,201

16,414,444

ADDITION

-6,268

19,376

24

521,25329,783

576,704

DISPOSAL via RECLASSIFICATION

ON

-------------

-

FAIR VALUE GAIN/(LOSS)ON

REVALUATION

3,77224,401

1,057(18,935)

400(24)

5,94725,270

6,3793,888

165,460(25,624)

14,2541,632

207,877

CLOSING BALANCE

1,441,9332,842,9981,787,721

878,1281,160,916

140,00452,107

240,770431,729183,188

6,924,648835,796114,254164,833

17,199,025

i. Additions above relates to enhancement of our existing properties during the year

(e) These are properties with titles yet to be fully perfected but which are at advanced stages of perfection. The delay is due to the length of time it takes to complete the statutory procedures for perfection in the normal course of business. There are no encumberances on these properties . Estimated cost of perfecting the title of these properties is put at N100million.

(c) The Thomas Wyatt House property is subject of an ongoing litigation. Our Legal experts are of the view that Leadway Assurance Company has a high probability of success based on the facts of the case and that there is no other encumbrance to the full realization of the property. There is no income being realized from the property.





Valuation techniques used to derive level 2 fair valuesLevel 2 fair values of land and buildings have been derived using the market valuation approach. Sales prices of comparable land and buildings in close proximity are adjusted for differences in key attributes such as property size and age.

(f) Non financial instruments measured at fair value

The following table sets out fair values of non financial instruments measured at fair value and analyses them by level in the fair value hierarchy into which each fair value measurement is categorised

Company31 December 2019All amounts are in thousands of Naira unless otherwise statedAssetsInvestment properties- Office property- Residential propertyTotal

Company31 December 2018All amounts are in thousands of Naira unless otherwise statedAssetsInvestment properties- Office property- Residential propertyTotal

Level 1

---

Level 2

14,061,9783,137,046

17,199,024

Level 3

--

Total

14,061,9783,137,046

17,199,024

Level 1

---

Level 2

12,469,0913,945,352

16,414,443

Level 3

---

Total

12,469,0913,945,352

16,414,443




15 Investment in subsidiary

(a) The Company's investment in subsidiary is as stated below: Leadway Vie (note v)

(b) Nature of investments in subsidiary Name of entity

Leadway Vie (note v)

Nature of business

Life Insurance

Country of incorporation

Cote d'iVoire

Company31-Dec-19

2,153,4252,153,425

Proportion of ordinary

shares directly held

by parent/

Company (%)

99.99%

Company31-Dec-18

2,153,4252,153,425

Proportion of ordinary

shares held by non-

controlling interest (%)

0.01%




(c ) Acquisition of subsidiary

(i) Identifiable assets acquired and liabilities assumed In 2018, the company acquired Leadway VIE, Cote D'voire, the following table summarises

the recognised amounts of assets acquired and liabilities assumed at the date of acquisition:

Cash and cash equivalentOther receivables and prepayments

Investment securitiesProperty and equipmentInvestment propertyOther liabilitiesCurrent tax liabilityInsurance contract liabilities

Total identifiable net assets/liabilities acquired

N'000

Carrying amounts

2,230,307377,683

141,23082,796

750,406(2,122,054)

(21,953)(2,223,228)

(784,813)

N'000

Fair value

2,230,30731,953

141,23082,796

1,300,629(2,122,054)

(21,953)(2,223,228)

(580,320)

(ii) Acquisition related costs The Company incurred acquisition related costs of CFA 20million (N11 million) on legal fees. This cost

was included in 'other expenses' in FY 2018.

(iii) Goodwill Goodwill arising from the acquisition has been recognised as follows: N'000 Cash consideration transferred 1,069,436

NCI, based on the proportionate interest in the recognised amounts of the assets and liabilities of 3AVie (now Leadway Vie) (58)

Fair value of identifiable net assets/liabilities 580,320 Goodwill 1,649,698




In thousand of Naira

AssetsCash and cash equivalent

Other receivables and prepaymentsInvestment securities

Deferred tax assetProperty and equipmentIntangible assetsInvestment propertyInvestment in subsidiaryTotal Assets

LiabilitiesOther liabilitiesBorrowingsCurrent tax liabilityDeferred tax liabilityInvestment contract liabilitiesInsurance contract liabilitiesTotal liabilities

Capital and reservesShare capitalRetained earningsShare premiumDepoosit for sharesTranslation reservesOther reserves

Total equity

Total Liabilities and Equity

Revenue

Profit/(loss) before income taxIncome tax expense/income

Profit after taxOther comprehensive income Total comprehensive income

Dec. 2019(12 months)


839,415

110,418398,696

-149,597

3,9761,268,425

-2,770,527

920,612-

25,051-

1,613,275321,406

2,880,344

1,900,201(1,842,803)

--

(176,041)8,826

(109,817)

2,770,527

(146,817)

(1,658,922)(1,843)

(1,660,765)-

(1,660,765)

Dec. 2018(9 months)

Dec. 2018(9 months)

688,559

420,146417,519

-157,131

1,3552,682,004

-4,366,714

260,603-

57,741--

2,025,5172,343,861

1,900,201115,056

---

7,596

2,022,853

4,366,713

2,289,218

1,060,341(39,964)

1,020,377-

1,020,377


Dec. 2019

-

--

------

-----

-

------

-

--

-

---

May 2018(5 months)

205,103

201,88420,082

7---

158,895585,971

33,945222,336

18,152--

274,433

2,025311,532

---

(2,020)

311,537

585,971

Dec. 2018(9 months)

30,019

58,495(19,829)

38,6661,531

40,197



-

--

------

-----

-

------

-

-

-

--

---

May 2018(5 months)

Dec. 2018(9 months)

788,506

1,503,8343,235,606

-407,065

75,712673,781

6,684,504

854,938-

560,16337,245

-

1,452,346

1,642,3612,762,165

53,465--

774,166

5,232,157

6,684,504

2,316,140

1,130,225-

1,130,225-

1,130,225



-

--

------

-----

-

------

-

-

-

--

---

May 2018(5 months)

Dec. 2018(9 months)

31,127

95,148-

27,0092,518,140

--

2,671,424

623,515308,592

16,439--

948,546

109,999(26,340)

1,127,662--

511,557

1,722,878

2,671,424

238,793

(140,313)(7,393)

(147,706)-

(147,706)



-

--

------

-------

------

-

-

-

--

---

May 2018(5 months)

Dec. 2018(9 months)

439,603

2,953,386250,276

-3,6358,960

-

3,655,860

1,621,817

799,598

118,919

-

-

940

2,541,275

440,000

674,585

-

-

-

-

1,114,585

3,655,860

0

400,195

225,860

(57,594)

168,266

-

168,266

The table below summarises the financial information of all the Parent's subsidiaries before any intra Company elimination. -

Leadway Vie Leadway Properties Leadway Pensure PFA Leadway Hotel Limited Leadway Capital & Trust Limited

Leadway Vie Leadway Properties Leadway Pensure PFA Leadway Hotel Limited Leadway Capital & Trust Limited




16 Deferred taxationDeferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

The movement on deferred tax account during the year was as follows:

Balance, beginning of yearDistribution of subsidiary(Charge) / credit to income statement

The movement in deferred tax liabilities account during the year was as follows:

Balance, Beginning of yearDistribution of subsidiary(Charge) / credit to income statement

Net deferred tax liability is attributable to the following:

Property and equipment

Unrealised exchange difference Unrecouped tax losses


Unrealised exchange difference Unrecouped tax losses

Net Deferred Tax Liabilities (See note "16.1" below)

Net deferred tax liabilities - Life Business

Net deferred tax liabilities - General Business

Net Deferred Tax Liabilities

Other Non-Current Assets and liabilities

Other Non-Current Assets and liabilities

Company31-Dec-19

----

(1,883,284)--

(1,883,284)

(1,883,284)

Company31-Dec-19

(44,594)

(551,718)

184,876-

(411,436)

(447,958)(105,089)

(918,800)-

(1,471,848)

(1,883,284)

Company31-Dec-18

286,446-

(286,446)-

(693,427)-

(1,189,857)(1,883,284)

(1,883,284)

Company31-Dec-18

201,668

(1,328,887)

303,652-

(823,567)

(86,448)(245,216)

(912,929)184,876

(1,059,717)

(1,883,284)




16.1 Movements in temporary differences during the year ended 31 December 2019


Distribution of subsidiary

Other non current assetsUnrealised exchange gainUnrecouped tax losses

Movements in temporary differences during the year ended 31 December 2018


Distribution of subsidiary

Other non current assetsUnrealised exchange gainUnrecouped tax losses

16.2 Analysis of amount of deferred tax recognised in profit or loss

Deferred tax from continuing operations

Balance at 1 January

Recognised in profit or loss

Recognised in other

comprehensiveincome

Balance at 31 December

115,220

(1,574,103)(609,277)

184,876

(1,883,284)

(607,772)

917,295(124,647)(184,876)

(0)

-

--

-

(492,552)

(656,808)(733,924)

-

(1,883,284)

Balance at 1 January

Recognised in profit or loss

Recognised in other

comprehensive income

Balance at 31 December

(951,205)

-(79,164)

(2,487,917)3111306.5

(406,980)

1,066,425

-(1,494,939)

1,878,640(2,926,430.50)

(1,476,304)

-

-

-

-

Company31-Dec-19

(0)

115,220

-(1,574,103)

(609,277)184876

(1,883,284)

Company31-Dec-18

(1,476,304)

Company

Company

The Company did not recognise deferred income tax assets of N65billion (2018: N32billion ) in respect of unrecouped losses amounting to N217billion (2018: N107billion) that can be carried forward against future taxable income. 95% of the unrecognised deferred tax and unrecouped losses is from the life business results.




17 Intangible assetsIn thousands of Naira Company

31 December 2019CostBalance, beginning of yearAdditions to goodwill on subsidiary acquired in the yearAddition to other intangible assetsReclassification to other assetsBalance, end of year

Accumulated amortizationBalance, beginning of yearAmortizationBalance, end of year

Carrying amountAs at end of yearAs at beginning of year

31 December 2018CostBalance, beginning of yearAdditions to goodwill on subsidiary acquired in the yearAddition to other intangible assetsReclassification to other assetsDerecognition on distribution of non insurance subsidiariesBalance, end of year

Accumulated amortizationBalance, beginning of yearAmortizationAmortization on discontinued operationsBalance, end of year

Carrying amountAs at end of yearAs at beginning of year

Impairment test of goodwillGoodwill is reviewed annually for impairment, or more frequently when there are indications that impairment may have occurred. Impairment assessment has been performed for the period, and no impairment losses on goodwill was recognized during the period under review as the recoverable amount of Goodwill as at 31 December 2019 was greater than its carrying amount and is thus not impaired. The recoverable amount was determined using a value-in-use computation.Goodwill is monitored by the Company on an entity by entity basisThe key assumption used in computing the value-in-use for goodwill in 2019 are as follows:

Software

1,091,910 -

60,708 79,054

1,231,672

915,625 153,599

1,069,224

162,448 176,285

1,094,654 - -

(2,744) -

1,091,910

753,816 161,809

- 915,625

176,285 340,838

Work in Progress

79,054 - -

(79,054) -

- - -

- -

52,046 -

27,008 - -

79,054

- - - -

79,054 52,046

Total

1,170,964 -

60,708 -

1,231,672

915,625 153,599

1,069,224

162,448 255,339

1,146,700 -

27,008 (2,744)

- 1,170,964

753,816 161,809

- 915,625

255,339 392,884




Cash Flow Forecast

Cash flows were projected based on past experience of operating results. These cashflows are based on the expected revenue growth for the entity over a 5 year period.

Discount Rate

Pre-tax discount rate of 11.1% (2018:11.9%) was applied in determining the recoverable amounts for the entity with goodwill (Leadway Vie Ltd). This discount rate was estimated using the risk-free rate using the average yeild on Ivorian goverment long term bond, equity risk premium and appropriate Beta.

Longterm term growth rate

The key assumptions described above may change as economic and market conditions change. The Company estimates that reasonably possible changes in these assumptions are not expected to cause the recoverable amount of the subsidiaries (from which the goodwill arose) to decline below their carrying amount.

18 Statutory deposits

This represents the Company's deposit with the Central Bank of Nigeria as at 31 December 2019, in compliance with the Insurance Act, CAP 117 LFN 2004. This amount is not available for the day-to day use in the working capital of the Company and is therefore excluded from cash and cash equivalents. Analysis of statutory deposits is as shown below:

Company31-Dec-19

300,000200,000

500,000

500,000500,000

Company31-Dec-18

300,000200,000

500,000

500,000500,000

General Insurance BusinessLife Business

Non Current

Income on statutory deposit is recognized in investment income




19 Trade payables

Reinsurance payableInsurance payableClaims DepositAgent Commssion Payable (paid in January 2020)Premium deposits (see note 'a' below)Matured and surrendered policy payable (see note 'c' below)

CurrentNon Current

a. The movement in premium deposit is as follows:

Balance, beginning of yearAddition during the yearTransfer to premium incomeBalance, end of year

Premium deposit represents premium received in advance but which the policy risk period is yet to commence as at reporting date.

b.

c.

20 Current income tax liabilities

The movement on current income tax liabilities during the year was as follows:

Balance, beginning of yearCharge for the year (see note (a) below)Payments during the yearAcquired from subsidiaries


(a) Analysis of charge for the year is as follows:

- Current year's income tax provision - Withholding tax on dividend income - Tax paid arising from back duty assessment

21 Other liabilities

Financial liabilities:Sundry creditorsStamp duties payableElfina Project payableDue to employees Accrued audit feeAccrued consultancy feeStaff profit sharing payableInsurance supervisory fee payableNCDF Levy

Non-financial liabilities:Deferred rental incomeUnearned incomeWithholding tax payablePremium suspense (see note 'b' below)Agency provident fundPAYE deductionsPension deductionNHF, Staff Cooperative and other statutory deductionsOffice rent payableVAT payableOther creditors

Total other liabilities

CurrentNon Current

a.

b.

Derecognition of balance of residual distributed entity

Claims deposit relates to claim amounts received from other insurance companies as their proportion on claims due to insured.

Premium suspense represents premium paid into the Company's bank account by customers which are yet to be matched withspecific policies as at the reporting date due to unavailability of relevant policy information. This is usually reconciled and matched with appropriate policies on a regular basis.

Matured and surrendered policy payable represents policies that has matured and undergoing settlement processes to the policy holders as at the reporting date majority of whom has been settled in the subsequent year.

Unearned income relates to commission received on premium ceded to reinsurer which has not been earned due to time apportionment


1,388,075 463,8101,644,328 2,002,069

162,149 98,315138,708 306,487

6,102,664 8,358,781254,199 344,342

9,690,123 11,573,804

9,690,123 11,573,804- -

9,690,123 11,573,804

Company Company31-Dec-19 31-Dec-188,358,781 9,391,509

(6,747,694) 7,349,5164,491,577 (8,382,244)6,102,664 8,358,781


434,750(659,196)

--

859,502-

Company31-Dec-19

434,750--

434,750

Company31-Dec-19

154,757---

49,500341,142682,106875,400719,510

2,822,414

1,560379,949438,881230,264

33,33715,982

-3,946

155,96551,637

405,8891,717,409

4,539,823

4,153,957385,866

4,539,823


753,157(788,745)

--

1,083,948

Company31-Dec-18

638,474114,683

-753,157

Company31-Dec-18

190,10394,57935,824

968,40030,000

264,616675,000807,515629,951

3,695,988

346,668442,101471,224239,756

-35,95913,77429,79216,348

150,417185,946

1,931,985

5,627,973

14,092,368545,215

5,627,973




22 Insurance contract liabilities

GrossClaims reported and loss adjustment payable (see note 22.1 below)Claims incurred but not reported - IBNR (see note 22.1 below)Unearned premium (see note 22.2 below)Life fund (see note 22.3 below)

Reinsurance receivablesPrepaid reinsurance (see note 9a)Claims reported & loss adjustment payable and IBNR (see note 9b)

Total reinsurers' share of insurance liabilities

Net insurance contract liability

Current (Gross)Non-current (Gross)

22.1 Analysis of gross benefit and claims expenses

General Insurance (see note 22.1d)Life (see note 22.1d)

Claims incurred but not reported

General InsuranceLife

(a) The aging analysis of claims reported and loss adjusted for general insurance contracts

Days0 - 9091- 180181 - 270271 - 365366 and above

(b) The aging analysis of claims reported for life insurance contracts

Days0 - 9091- 180181 - 270271 - 365366 and above

(c) Movement in outstanding claims provision inclusive of IBNR:

Balance, beginning of yearLess movement: - Claims incurred during the year - Claims paid during the year (see note 29)Net movement in the year


Outstanding claims represents the estimated cost of settling all claims arising from incidents occurring as at the reporting date. The liability adequacy test for outstanding claims liability as at 31 December 2019 and the comparative periods were done by Ernst &Young Nigeria Limited (FRC/2012/NAS/00000000738).

Outstanding claims above 90 days are those that are awaiting relevant documentations to facilitate settlement. Sufficient funds has been set aside to meet these obligations.

Company31-Dec-19

47,239,571

14,603,60210,313,508

224,547,452

296,704,133-

3,193,766

35,352,553

38,546,319

258,157,814

72,156,681224,786,922296,943,603

Company31-Dec-19

44,723,0002,516,571

47,239,571

Company31-Dec-19

13,294,9601,308,642

14,603,602

61,843,173

Company31-Dec-19

5,868,456630,505

1,647,772850,560

35,725,70744,723,000

Company31-Dec-19

466,149206,434184,418214,164

1,445,4052,516,571

Company31-Dec-19

66,437,365

9,289,156(13,883,348)

(4,594,192)

61,843,173

Company31-Dec-18

56,789,173

9,648,1928,571,621

150,428,171

225,437,157

3,127,725

40,492,412

43,620,137

181,817,020

92,008,986133,428,171225,437,157

Company31-Dec-18

54,314,9852,474,188

56,789,173

Company31-Dec-188,320,9011,327,291

9,648,192

66,437,365

Company31-Dec-18

4,113,0008,597,280

15,142,587204,165

26,257,95354,314,985

Company31-Dec-18

439,083141,313

87,0571,439,475

367,2602,474,188

Company31-Dec-18

54,905,849

37,599,015(26,067,499)

11,531,516

66,437,365




Claims reported IBNR Total

555,171 894,942 1,450,113974,948 1,265,935 2,240,883841,443 215,535 1,056,978868,262 401,395 1,269,657165,279 44,356 209,635276,331 365,832 642,163259,167 242,357 501,524

40,782,399 9,864,608 50,647,00744,723,000 13,294,960 58,017,960

2,285,465 1,308,642 3,594,10732,401 - 32,401

198,705 - 198,7052,516,571 1,308,642 3,825,213

47,239,571 14,603,602 61,843,173

Company

31-Dec-19

Claims reported IBNR Total

799,826 261,116 1,060,9422,117,713 592,595 2,710,308

713,074 201,580 914,654746,719 29,769 776,488

- - -885,526 22,163 907,689244,849 225,707 470,556

48,807,278 6,987,971 55,795,24954,314,985 8,320,901 62,635,886

2,179,573 1,327,291 3,506,864110,832 - 110,832183,783 - 183,783

2,474,188 1,327,291 3,801,479

56,789,173 9,648,192 66,437,365

31-Dec-18

(d) Compan a lysis clai r po an IBNR by class:y na of ms e rted d

General Insurance:MotorFireGeneral accidentMarineAgricBondEngineeringSpecial risk

Life:Company lifeIndividual lifeAnnuity

Total claims

Company

General Insurance:MotorFireGeneral accidentMarineAgricBondEngineeringSpecial risk

Life:Company lifeIndividual lifeAnnuity

Total claims

Included in “claims reported and loss adjustment payable” for the year is N50.09million (2018:N187.3m) representing insurance claims which are subject of ongoing litigations. The provision charged is recognised in “claims and loss adjustment expense”. In the Directors’ opinion, the outcome of these legal claims will not give rise to any significant loss beyond the amounts provided as at 31 December 2019.




22.2 Unearned premium

Company analysis of unearned premium by class:

General InsuranceMotorFireGeneral accidentMarineAgricBondEngineeringSpecial risk

LifeCompany life

Movement in unearned premium is as follows:

Balance, beginning of the yearIncrease during the year


22.3 Analysis of life fund is as follows:

Individual lifeAnnuity

(i) The movement on the life insurance liability during the year was as follows:

Company - 2019

Balance, beginning of yearAcquired from subsidiaryReclassification of DAAddition/reduction during the year


Company - 2018

Balance, beginning of yearAcquired from subsidiaryAddition during the year


(ii) The movement in Annuity fund during the year was as follows:

Balance, beginning of yearPremiums received during the yearPayments during the yearChanges in actuarial valuation

Balance as at 31 December


1,370,040 1,168,6491,067,747 971,189

468,601 418,190131,707 871,663661,129 -

44,456 20,479244,984 391,232

4,637,496 3,698,2648,626,160 7,539,666

1,687,347 1,031,957

10,313,507 8,571,623


8,571,621 8,789,1311,741,887 (217,510)

10,313,508 8,571,621

Company Company31-Dec-19 31-Dec-184,111,418 3,117,938

220,436,034 147,310,233

224,547,452 150,428,171

Individual life Annuity Total3,117,938 147,310,233 150,428,171

- - -- - -

993,480 73,125,801 74,119,281

4,111,418 220,436,034 224,547,452

Individual life Annuity Total2,997,755 117,289,811 120,287,566

- - -120,183 30,020,422 30,140,605

3,117,938 147,310,233 150,428,171

Company


147,310,233 117,289,81148,404,850 51,764,070

(29,066,230) (22,308,814)53,787,180 565,166

220,436,034 147,310,233




Accident Year2007200820092010201120122013201420152016201720182019

1-

853,038 744,027 758,364 839,901 894,025 907,835 963,872

1,190,393 1,296,782 1,155,119 1,456,1381,568,319

2201,283 421,486 497,530 471,609 406,306 505,792 612,597 390,059 402,538 310,620 317,446 317,759

-

328,568 72,016 55,340 65,663 39,577 24,724 23,085 85,746 53,877

2,446 17,930

-

46,997

18,286 11,042 13,725

3,506 13,153 38,907 36,049

6,457 2,000

-

-

53,493 5,934 1,626 6,279

13,070 10,034

4,518 8

560 - -

-

63,640 4,180 2,709

635 3,193 2,831

- 6,429

- - -

-

7- - -

4,042 9,058

- - - - - -

-

8- -

1,497 1,124

- 502

- - - - -

-

9-

704 - - - - - - - - -

-

10- - - - - - - - - - -

-

11- - - - - - - - - - -

-

MOTOR Table of claims paid excluding large claims (Attritional Table)

Accident Year2007200820092010201120122013201420152016201720182019

1-

2,914,161 2,231,567 2,034,497 2,042,830 1,941,492 1,825,447 1,789,589 2,016,572 1,854,151 1,431,568 1,615,113 1,568,319

2687,626

1,264,167 1,334,747 1,147,061

882,346 1,017,030 1,137,388

660,775 575,553 384,959 353,540 317,759

-

385,685

193,202 134,600 142,596

79,580 45,904 39,106

122,600 66,772

2,724 17,930

--

418,772 44,476 23,979 27,598

6,509 22,281 55,630 44,676

7,191 2,000

- - -

58,497

12,886 3,270

11,659 22,140 14,346

5,599 9

560 - - - -

67,905 8,405 5,029 1,076 4,565 3,509

- 6,429

- - - - -

7- - -

5,779 11,226

- - - - - -

- -

8- -

2,141 1,392

- 502

- - - - - - -

9-

1,007 - - - - - - - - - - -

10-- - - - - - - - - - - -

11- - -- - - - - - - - - -

MOTOR Table of inflated adjusted claims paid excluding large claims (Attritional Table)

Accident Year2007200820092010201120122013201420152016201720182019Total

Paid to date808,485

4,438,304 3,735,331 3,371,657 3,049,196 3,045,064 3,063,170 2,624,078 2,666,647 2,243,834 1,803,038 1,932,872 1,568,319

34,349,995

Latest Paid Large Loss

- 102,653

71,251 60,074 35,858 40,776

142,092 137,190 230,991 301,767 172,073 176,694 126,794

1,598,213

Total Ultimate 808,485

4,540,957 3,806,582 3,431,731 3,085,054 3,086,050 3,214,799 2,779,140 2,904,961 2,611,359 2,118,142 2,301,759 2,709,462

37,398,481

Gross claims reserve

- - - - -

210 9,537

17,871 7,322

65,757 143,031 192,193

1,014,349 1,450,270

Gross Earned Premium

3,459,782 3,459,782 3,459,782 4,005,126 4,005,126 3,961,399 3,248,131 3,465,694 2,954,417 2,819,910 2,963,988 3,434,077 3,856,002

45,093,216

Ultimate Loss ratio

23%131%110%

86%77%78%99%80%98%93%71%67%70%

MOTOR Combined results table (Attritional and Large Losses)

22.4 Claims development tablesThe claims development table provides a measure of the Company's ability to estimate the ultimate value of claims. The top half of each table below illustrates how the Company’s estimate of total claims outstanding for each year has changed at successive year-ends. The bottom half of the table reconciles the cumulative claims to the amount appearing in the consolidated statement of financial position.




Year2007200820092010201120122013201420152016201720182019

1-

7,021 40,790 23,720 20,311 31,107 40,346 85,778 57,143 51,127 55,758 54,241 50,983

232,204 35,216 55,128 38,788 56,873 47,004

115,740 52,129 54,315 41,192 41,346 47,642

-

39,310

20,787 17,683

2,791 43,413

8,616 16,278 36,809

2,835 11,300

3,364 - -

4270 378 285

3,885 7,612 1,806 2,690 5,793 5,159 4,625

- - -

5-

6,761 575

1,188 3,053 1,575 1,158

131 397

- - - -

6-

206 116

15 - - -

3 - - - - -

7722

72 319

1,817 - -

18 - - - - - -

8-

20 1,713

- -

386 - - - - - - -

9- - - - - - - - - - - - -

10- - -

1,745 - - - - - - - - -

11- - - - - - - - - - - - -

ENGINEERING Table of claims paid excluding large claims (Attritional Table)

Accident Year2007200820092010201120122013201420152016201720182019

1-

23,984 122,343

63,635 49,400 67,552 81,126

159,261 96,803 73,103 69,102 60,408 50,983

2110,017 105,625 147,894

94,342 123,508

94,515 214,891

88,309 77,660 51,051 46,047 47,642

-

327,925 55,767 43,008

6,060 87,293 15,997 27,575 52,630

3,513 12,585

3,364 - -

4724 920 618

7,811 14,132

3,059 3,846 7,180 5,746 4,625

- - -

5-

14,683 1,156 2,205 5,172 2,252 1,435

146 397

- - - -

6-

415 215

26 - - -

3 - - - - -

71,452

134 541

2,598 - -

18 - - - - - -

8-

34 2,449

- -

386 - - - - - - -

9- - - - - - - - - - - - -

10- - -

1,745 - - - - - - - - -

11- - - - - - - - - - - - -

ENGINEERING Table of inflated adjusted claims paid excluding large claims (Attritional Table)


Paid to date140,117 201,562 318,223 178,421 279,504 183,762 328,891 307,529 184,119 141,363 118,513 108,050

50,983 2,541,037


- 21,817 32,923

112,382 136,665

77,692 102,083 312,333

74,748 61,570 95,024 79,576

776 1,107,590

Total Ultimate 140,117 223,379 351,147 290,803 416,169 261,454 430,974 628,680 269,593 213,078 288,391 316,182 319,533

4,149,500


- - - - - - -

8,818 10,726 10,145 74,854

128,556 267,774 500,873

Gross Earned Premium593,884 593,884 593,884 550,249 550,249 716,219 687,315 980,992 817,303 799,904

1,236,223 1,333,565 1,181,265

10,634,936

Ultimate Loss ratio

24%38%59%53%76%37%63%64%33%27%23%24%27%

ENGINEERING Combined results table (Attritional and Large Losses)

12- - - - - - - - - - - - -

12- - - - - - - - - - - - -




Accident Year2007200820092010201120122013201420152016201720182019

1-

374,759 138,680 175,303 237,670 141,267 304,906 356,023 277,168 309,003 295,526 277,942 439,690

2107,972 302,531 163,929 127,912 439,609 278,907 174,174 225,666 261,308 287,652 244,555 436,740

-

392,652

107,940 36,520 34,528

112,765 18,893 21,852 64,750 12,866 31,614 45,102

--

43,492

19,373 7,903

46,782 1,627 6,504

37,622 15,966

1,637 8,129

- --

53,087 1,583

619 10,745

339 4,875

225 627

1,755 - -

- -

61,947

310 -

43 4,064

23 -

611 - - -

- -

7549 288

54 1,483 5,426

- 62

- - - - - -

8-

20 4,180

- -

776 - - - - - - -

9-

20 - -

13 - - - - - - - -

10463

- - - - - - - - - -

- -

11- -

133 - - - - - - - - - -

FIRE Table of claims paid excluding large claims (Attritional Table)

Accident Year2007200820092010201120122013201420152016201720182019

1-

1,280,257 415,946 470,293 578,067 306,780 613,096 661,016 469,533 441,816 366,253 309,544439,690

2368,855 907,384 439,781 311,111 954,668 560,819 323,384 382,288 373,621 356,494 272,361 436,740

-

3277,893 289,577

88,824 74,982

226,745 35,078 37,018 92,581 15,945 35,208 45,102

--

49,369

47,120 17,163 94,068

3,022 11,018 53,793 19,787

1,823 8,129

- - -

57,509 3,438 1,244

19,949 574

6,971 278 699

1,755 - - - -

64,228

624 -

73 5,811

28 -

611 - - - - -

71,104

535 91

2,121 6,724

- 62

- - - - - -

8-

34 5,977

- -

776 - - - - - - -

9-

29 - -

13 - - - - - - - -

10661

- - - - - - - - - - - -

11- -

133 - - - - - - - - - -

FIRE Table of inflated adjusted claims paid excluding large claims (Attritional Table)


Paid to date669,618

2,528,998 969,025 972,597

1,775,626 921,470

1,027,631 1,156,982

862,678 841,647 683,717 746,284 436,690

13,592,963


202,602 1,840,810

89,484 127,207 560,752 396,060 455,342 842,325 450,093

2,548,554 1,375,601 1,204,557

229,292 10,322,680


4,369,808 1,058,509 1,099,804 2,336,378 1,317,530 1,483,079 2,047,730 1,392,419 3,460,726 2,163,623 2,257,458 2,297,241

26,156,526


- - - - - -

106 48,423 79,648 70,525

104,305 306,617

1,631,259 2,240,883


1,203,372 1,203,372 1,203,372 1,644,687 1,878,292 1,967,539 2,029,174 2,021,096 1,990,048 2,326,034 2,575,040 3,038,005 3,275,502

26,355,533

Ultimate Loss ratio

72%363%

88%67%

124%67%73%

101%70%

149%84%74%70%

FIRE Combined results table (Attritional and Large Losses)




MARINE Table of claims paid excluding large claims (Attritional Table)

1-

627,459 272,808 187,679 217,506 311,251 245,957 307,964 274,609 172,414 159,624 275,353 256,061

267,613

218,568 288,957 174,283 181,842 230,093 225,559 182,191 207,413 114,533 146,464 131,126

-

363,527

- 69,769 22,411 19,681 11,888 25,708 52,335 25,657 15,019

4,272 - -

47,750 9,498 9,401

472 5,577

762 -

9,965 14,375

6,071 - - -

54,890

14,265 1,868 5,288

250 523

1,961 5,957

- - - - -

6-

60 107

- 53 39

- 81

- - - - -

7-

7,176 92

- - - - - - - - - -

8- - - - - - - - - - - - -

9- - - - - - - - - - - - -

10- - - - - - - - - - - - -

11- - - - - - - - - - - - -

MARINE Table of inflated adjusted claims paid excluding large claims (Attritional Table)

Paid to date143,780 877,027 643,003 390,132 424,909 554,556 499,185 558,492 522,054 308,038 310,360 406,479 256,061

5,894,076


- 21,131 72,727

- 16,644

271,138 270,989 315,613 572,856 101,676 143,562 600,601 128,437

2,515,372

Total Ultimate 143,780 898,158 715,729 390,132 441,553 825,694 770,174 906,716

1,202,497 486,344 533,878

1,306,824 1,057,625 9,679,104


- - - - - - -

32,611 107,588

76,630 79,956

299,745 673,127

1,269,657

Gross Earned Premium862,220 862,220 862,220

1,005,603 1,026,446 1,083,007 1,000,601 1,262,545 1,136,917

621,818 1,247,786 1,511,154 1,931,262

14,413,799

Ultimate Loss ratio

17%104%

83%39%43%76%77%72%

106%78%43%86%55%

MARINE Combined results table (Attritional and Large Losses)

1-

183,671 90,957 69,958 89,427

143,326 122,320 165,869 162,103 120,585 128,799 247,241 256,061

219,792 72,873

107,709 71,656 83,735

114,430 121,486 107,548 145,063

92,416 131,511 131,126

-

321,180 23,692 28,685 10,320

9,788 6,403

15,176 36,603 20,702 13,486

4,272 - -

42,889 3,905 4,329

234 3,004

450 -

8,041 12,907

6,071 - - -

52,010 6,569

929 2,848

147 366

1,582 5,348

- - - - -

6-

30 58

- 37 32

- 81

- - - - -

7-

3,865 54

- - - - - - - - - -

8- - - - - - - - - - - - -

9- - - - - - - - - - - - -

10- - - - - - - - - - - - -

11- - - - - - - - - - - - -

Accident Year2007200820092010201120122013201420152016201720182019

Accident Year2007200820092010201120122013201420152016201720182019

Accident Year2007200820092010201120122013201420152016201720182019




GENERAL ACCIDENT Table of claims paid excluding large claims (Attritional Table)

GENERAL ACCIDENT Table of inflated adjusted claims paid excluding large claims (Attritional Table)


Paid to date 794,863

1,014,553 664,976 602,725 694,655 597,752 334,254 376,476 330,950 352,249 235,462 163,318

77,114 6,239,347


62,258 231,033 175,847 375,106 201,389 218,812 138,183 103,923 356,710

14,773 89,506 33,825 37,319

2,038,684


1,245,587 840,823 977,831 896,045 816,652 472,683 571,580 796,785 452,618 450,666 340,704 616,066

9,335,161


- - - - -

87 246

91,182 109,124

85,596 125,698 143,562 501,633

1,057,128


2,322,854 2,322,854 2,322,854 1,824,950 2,021,176 1,367,701 1,196,502 1,143,149 1,183,481 1,175,191 1,131,193 1,504,350 1,654,787

21,171,042

Ultimate Loss ratio

37%54%36%54%44%60%40%50%67%39%40%

37%

GENERAL ACCIDENT Combined results table (Attritional and Large Losses)

1-

78,583 62,974 80,873 99,785

116,947 67,883 52,707 79,920

117,173 64,491 86,842 77,114

2150,727 115,978

98,556 80,915

129,214 115,763

72,208 113,680

92,493 123,799 111,364

66,601 -

345,046 58,285 47,384 40,296 58,716 38,016 26,216 46,197 28,800 22,693 31,511

- -

425,010 88,778 33,570 23,772 18,214 11,916

9,508 14,664 20,117

6,013 - - -

521,267

4,000 6,790

20,746 8,526

14,145 4,581 1,592 5,218

- - - -

65,632 8,545 2,424 5,813 2,777

17 -

38 - - - - -

75,118 3,285 3,005 1,999

3 -

8 - - - - - -

81,769 1,573

118 284 582

- - - - - - - -

9- - -

107 403

- - - - - - - -

10150

- -

1,957 - - - - - - - - -

11- - - - - - - - - - - - -

12- - - - - - - - - - - - -

Accident Year2007200820092010201120122013201420152016201720182019

12- - - - - - - - - - - - -

Accident Year2007200820092010201120122013201420152016201720182019

1-

268,457 188,880 216,961 242,699 253,965 136,496

97,860 135,388 167,535

79,925 96,716 77,114

2514,915 347,855 264,399 196,803 280,605 232,772 134,066 192,578 132,247 153,428 124,026

66,601 -

3135,106 156,365 115,249

87,507 118,065

70,583 44,411 66,053 35,693 25,273 31,511

- -

467,095

215,929 72,902 47,800 33,818 20,186 13,595 18,174 22,404

6,013 - - -

551,727

- 13,652 38,519 14,443 20,225

5,678 1,773 5,218

- - - -

612,231 17,182

4,501 9,847 3,971

21 -

38 - - - - -

710,291

6,100 5,090 2,859

3 -

8 - - - - - -

83,284 2,665

169 353 649

- - - - - - - -

9- - -

119 403

- - - - - - - -

10214

- -

1,957 - - - - - - - - -

11- - - - - - - - - - - - -

12- - - - - - - - - - - - -

12- - - - - - - - - - - - -

Accident Year2007200820092010201120122013201420152016201720182019Tota




Accident Year2007200820092010201120122013201420152016201720182019

1-

75,938 21,339

2,687 283,845 488,898 307,415 179,905

93,525 477,003

26,612 60,007 19,476

2563

81,831 154,217 209,669 281,558 605,149

50,813 212,813 110,020 132,182 792,470 315,954

-

3548

- 5,827 1,657

665 - -

315 738

31,076 22,434

- -

4215

- - - - - -

14,049 -

281,560 - - -

5-

125 - - - - - -

2,000 - - - -

6- - - - - -

290 - - - - - -

7- - - -

180 79

- - - - - - -

8- - - -

50 80

- - - - - - -

9- - - - - - - - - - - - -

10- - - - - - - - - - - - -

11- - - - - - - - - - - - -

12- - - - - - - - - - - - -

BOND Table of claims paid excluding large claims (Attritional Table)

Accident Year2007200820092010201120122013201420152016201720182019

1-

259,419 64,001

7,209 690,376

1,061,705 618,141 334,023 158,434 682,024

32,981 66,829 19,476

21,923

245,438 413,725 509,963 611,439

1,216,815 94,342

360,514 157,308 163,817 882,574 315,954

-

31,642

- 14,174

3,599 1,337

- -

450 914

34,609 22,434

- -

4577

- - - - - -

17,411 -

281,560 - - -

5-

271 - - - - - -

2,000 - - - -

6- - - - - -

323 - - - - - -

7- - - -

223 87

- - - - - - -

8- - - -

56 80

- - - - - - -

9- - - - - - - - - - - - -

10- - - - - - - - - - - - -

11- - - - - - - - - - - - -

12- - - - - - - - - - - - -

BOND Table of inflated adjusted claims paid excluding large claims (Attritional Table)


Paid to date4,142

505,128 491,900 520,771

1,303,431 2,278,687

712,806 712,398 318,656

1,162,010 937,989 382,784

19,476 9,350,178


- - - - - - - - - - -

- -


505,128 515,755 520,771

1,372,551 2,278,687

712,806 715,909 318,689

1,239,392 981,346 430,250 397,414

9,992,840


- -

23,855 -

69,120 - -

3,511 33

77,383 43,357 47,466

377,938 642,663

Gross Earned Premium272,411 272,411 272,411 427,458 599,336 761,353 593,545 761,845 728,863 740,170 594,131 696,329 883,810

7,604,074

Ultimate Loss ratio

2%185%189%122%229%299%120%

94%44%

167%165%

62%45%

BOND Combined results table (Attritional and Large Losses)




Accident Year2007200820092010201120122013201420152016201720182019

14,534

19,199 3,884

23,568 68,684 82,728

4,118 72,022 12,651 48,595 64,380

219,267 67,272

29,535 3,025

- 53,773

165,111 7,382

372,917 294,280

26,561 17,398 77,926

356,636 -

3-

1,379 2,624

196,010 65,533

277,016 78,512

- 6,535

422,680 350,175

- -

411,877

- -

9,282 85,041

146,549 1,881 4,626

143,008 309,896

- - -

5- -

22,215 25,490

3,324 169,718

1,624 2,569 5,941

- - - -

6-

8,865 677

- -

669 26,143

8,365 - - - - -

7- -

6,908 -

2,238 67,147

292 - - - - - -

8- - - -

900 - - - - - - - -

9-

280 662 401

- - - - - - - - -

10-

2,982 1,581

- - - - - - - - - -

11-

1,327 - - - - - - - - - - -

12- - - - - - - - - - - - -

SPECIAL RISK Table of claims paid excluding large claims (Attritional Table)

Accident Year2007200820092010201120122013201420152016201720182019

117,830 65,589 11,650 63,227

167,055 179,654

8,280 133,722

21,431 69,482 79,788

244,197 67,272

232,572

9,072 -

130,787 358,561

14,843 692,383 498,521

37,977 21,562 86,787

356,636 -

3-

3,700 6,383

425,661 131,771 514,326 133,002

- 8,099

470,738 350,175

- -

431,862

- -

18,664 157,894 248,259

2,689 5,733

159,268 309,896

- - -

5- -

44,669 47,326

5,631 242,664

2,013 2,861 5,941

- - - -

6-

17,825 1,258

- -

829 29,116

8,365 - - - - -

7- -

11,702 -

2,774 74,782

292 - - - - - -

8- - - -

1,002 - - - - - - - -

9-

401 821 447

- - - - - - - - -

10-

3,696 1,760

- - - - - - - - - -

11-

1,478 - - - - - - - - - - -

12- - - - - - - - - - - - -

SPECIAL RISK Table of inflated adjusted claims paid excluding large claims (Attritional Table)


Paid to date82,264

101,762 78,242

686,111 824,687

1,275,359 867,774 649,202 232,717 871,678 516,749 600,833

67,272 6,854,650


- -

207,736 342,307 583,844

2,499,428 - -

367,277 3,486,963

14,381,594 1,014,824

851,049 23,735,023

IBNER-

36,000 216,000 108,000 396,000 468,000 936,000 792,000

- - - - -

2,952,000


282,021 522,469

1,145,908 2,396,131 5,732,865 3,628,241 2,884,436 2,917,995 5,575,140

34,552,113 8,829,278

12,687,820 81,236,681


- 180,259 236,490 117,490 987,599

1,958,078 2,760,466 2,235,234 2,318,001 1,216,499

19,653,770 7,213,621

11,769,498 50,647,005


7,504,563 11,687,862 11,515,695

6,616,535 6,290,318

12,863,770 10,615,790 11,748,608 10,975,832 12,006,726 14,528,257 18,364,393 21,031,263

155,749,614

Ultimate Loss ratio

1%2%5%

17%38%45%34%25%27%46%

238%48%60%

SPECIAL RISK Combined results table (Attritional and Large Losses)




24 Capital and reserves

a Share capital

(i) Authorised: Ordinary shares of 50k each: 20,000,000,000 units (2018: 10,000,000,000 units)

(ii) Issued and fully paid; The issued and fully paid up capital of the company which is a composite insurer is

N10bn (2018: N10bn). In line with regulations issued by the National Insurance Commission (NAICOM), issued and paid capital of the company is allocated as follows;

Ordinary shares of 50k each:General Insurance business 10,000,000,000 units (2018: 10,000,000,000)

Life business 10,000,000,000 units (2018: 10,000,000)

23 Investment contract liabilities

Movement in investment contract liabilities is as shown below

Balance, beginning of year Reclassification from Insurance contract liabilities Deposits received Withdrawals Guaranteed interest charged during the year


Current Non Current

b Share premium Share premium comprises the amount paid over the nominal value of shares. This

reserve is not ordinarily available for distribution.

c Retained earnings The retained earnings is the carried forward recognised income net of expenses plus

current profit attributable to shareholders. It is the amount available for dividend distribution to the equity shareholders of the company. See statement of changes in equities for movement in retained earnings.

d Other Reserves Components of other reserves are as follows:

Contingency reserve (see note (i) below) Asset revaluation reserves (see note (ii) below) Fair value reserves (see note (iii) below Translation reserve (see note (iv) below)

Company31-Dec-19

21,890,989 -

9,856,703 (6,747,694)

1,796,214

26,796,212

3,287,701 23,508,511

26,796,212

Company31-Dec-18

22,532,309 -

7,954,712 (10,808,192)

2,212,161

21,890,990

3,287,701 18,603,289

21,890,990

Company31-Dec-19

10,000,000

Company31-Dec-18

10,000,000

Company31-Dec-19

5,000,000

5,000,000 10,000,000

Company31-Dec-18

5,000,000

5,000,000 10,000,000

Company31-Dec-19

13,648,609 1,558,700 4,198,892

- 19,406,201

Company31-Dec-18

11,732,730 1,497,291 3,090,660

- 16,320,681




(i) Contingency reservesIncluded in the contigency reserve is contigency reserve from Leadway Assurance Company general insurance and life business in line with Insurance act of 2003.In compliance with Section 21 (1) of Insurance Act 2003, the contingency reserve for general insurance business is credited with the greater of 3% of total premiums or 20% of the net profits (whichever is greater).This shall accumulate until it reaches the amount of greater of minimum paid-up capital or 50 percent of net premium. While for life business, the contingency reserves is credited with an amount equal to 1% of gross premium or 10% of net profit (whichever is greater) and accumulated until it reaches the amount of minimum paid up capital.

Leadway Vie maintains a Legal reserve in accordance with the provisions of Article 346 of the OHADA Treaty on Commercial Companies and Economic Interest Groupings, a company is expected to set aside 10% of its profit after tax, after payment of dividends minus carried forward losses as legal reserve. This ceases to be mandatory when the amount so set aside reaches 20% of its stated capital.

(ii) Asset revaluation reserve This reserve is the accumulation of revaluation gain on the company's land and buildings. See statement of changes in equities for movement in asset revaluation reserve.

(iii) Fair value reserve Fair value reserve includes the net accumulated change in the fair value of available for sale asset until the investment is derecognized or impaired. See statement of changes in equities for movement in fair value reserve.

(iv) Translation reserve The translation reserve comprises foreign exchange differences on the translation to Naira of the results and financial position of the foreign subsidiary within the Company. See statement of changes in equity for movement in translation reserve.

25 Non controlling interest Non controlling interest comprises:

Leadway Vie

Analysis of movement in controlling interest(a) See statement of changes in equities for movement in non controlling interest during the period

(b) The financial information for the subsidiary (2019: subsidiaries) with non-controlling interest are disclosed in note 15 (investment in subsidiaries) of these financial statements.

26 Gross premium written

Gross premium - General Insurance business - Life business

Decrease /(Increase)

- Unearned premium (see note (a) I below)

Gross premium income

Company31-Dec-19

-

Company31-Dec-18

-

Company31-Dec-19

35,046,532 55,549,660 90,596,192

(1,741,886)

88,854,306

Company31-Dec-18

30,238,299 57,281,421 87,519,720

217,510

87,737,230




a) The movement in unearned premium is analysed as follows:

(i) General Insurance business

Motor Fire General Accident Agric Bond Marine Engineering Special risk Total for General Business

Group life

(ii) Life business - Annuity & Ind. Life Individual life Annuity

27 Reinsurance expenses

Reinsurance premium paid Increase in unexpired reinsurance cost

28 Commission income

Commission earned on general insurance contracts Commission earned on Company life assurance contracts

29 Analysis of Net Claims Expense

Combined

Gross benefits & claims paid (see note 22.1c) Annuity Claims Claims ceded to reinsurers Change in provision for outstanding claims & IBNR Proceed from salvage and subrogation Change in reinsurance recoverable on outstanding claims & IBNR

General Insurance business

Gross benefits & claims paid Claims ceded to reinsurers Change in provision for outstanding claims Recoveries from salvage and subrogation Change in recoverable on outstanding claims (a)

Life business Gross benefits & claims paid Annuity Claims Claims ceded to reinsurers Change in provision for outstanding claims Change in recoverable on outstanding claims (b) (a+b)

Company31-Dec-19

(201,391) (169,810) (140,834)

210,533 32,807

(23,978) 145,410

(939,232) (1,086,495)

(655,391)

(1,741,886)

Company31-Dec-18

37,332 213,710

(135,912) -

(138,871) 6,850

(3,144) 506,077 486,042

(268,532)

217,510

Company31-Dec-19

(993,480) (73,125,802) (74,119,282)

Company31-Dec-18

(120,183) (30,020,421) (30,140,604)

Company31-Dec-19

18,022,240 (66,041)

17,956,199

Company31-Dec-18

16,018,811 596,544

16,615,355


118,934 2,888,179


152,567 1,879,671

Company31-Dec-19

13,883,348 27,435,750 (3,319,096) (4,594,192)

(71,170) 5,139,861

38,474,501

Company31-Dec-18

26,067,499 21,025,441

(15,555,597) 11,531,516

(89,495) (9,087,671)

33,891,693

Company31-Dec-19

9,552,855 (3,088,747) (4,617,927)

(71,170) 4,573,557

6,348,568

Company31-Dec-18

21,819,387 (15,105,954)

10,838,510 (89,495)

(9,067,716)

8,394,732


27,435,750 (230,349)

23,735 566,304

32,125,933

38,474,501


21,025,441 (449,642)

693,006 (19,956)

25,496,961

33,891,693




30 Underwriting expensesUnderwriting expenses can be sub-divided into acquisition and other maintenance expenses. Acquisition expenses relate to commission expenses incurred in obtaining and renewing insurance contracts. They include commissions or brokerage paid to agents or brokers. Maintenance expenses are those incurred in processing costs and other incidental costs.

Acquisition expenses Maintenance expenses

31 Investment income

Interest income on debt securities Rental income Interest on loans Interest on Finance Lease Interest on short term deposits Dividend income on investment securities Profit/(Loss)on sale of investment securities Interest income on statutory deposits (Loss)/ Profit on Sale of Investment Property

a. Profit/(Loss) from investment contracts

The above figure relates to profit or (loss) for the year, see DA revenue in appendix

32 Net fair value gain/ (loss) on assets at fair value

Financial assets at fair value through profit or loss - Fair value gains/(losses) on listed equity securities- Fair value gains/(losses) on listed debt securities- Fair value gains/(losses) on investment property

33 Other operating income

Fee income on shared locations & services

Profit/ (Loss) on sale of property and equipment Foreign exchange gain/(loss) - Investment securities - Cash and cash equivalents - Loans and advances - others Other income

Other income represents income on current account, surrender fees, policy fees, and other miscellaneous income that does not fall under income head above

34 Employee benefit expense

Wages and salaries - staff and executive directors Pension cost - Defined contribution plan Termination benefits (see note (d) below) Profit sharing expense

(a) Staff information: Employees earning more than N100,000 per annum, other than the executive directors, whose duties were wholly or

mainly discharged in Nigeria, received emoluments in the following ranges:

Company31-Dec-19

5,786,757 2,341,947

8,128,704

Company31-Dec-18

5,554,578 604,916

6,159,494

Company31-Dec-19

25,737,607 754,360 162,304

- 985,868

1,307,103 2,864,382

41,831 -

31,853,455

Company31-Dec-18

19,659,077 928,082 154,337

- 1,188,768

921,056 (118,982)

57,217 15,894

22,805,449

Company31-Dec-19

602,697

Company31-Dec-18

239,712

Company31-Dec-19

(1,425,147) 35,075,322

207,877

33,858,052

Company31-Dec-18

(118,245) (12,102,386)

410,960

(11,809,671)

Company31-Dec-19

14,180

3,424

(6,158) (40,352)

- -

734,510

705,604

Company31-Dec-18

6,940

(28,954)

441,173 2,582,122

- 170,532

1,091,091

4,262,904

Company31-Dec-19

2,541,990 35,068

- 619,080

3,196,138

Company31-Dec-18

2,334,892 1,061,090

- 449,166

3,845,148




Absolute N101,001 - N500,000 N500,001 - N750,000 N750,000 - N1,000,000 N1,000,000 - N2,000,000 N2,000,000 - N3,000,000 Over N3,000,000

(b) The average number of full time persons employed during the year was as follows:

Executive directors Management staff Non-management staff

(c ) Directors' remuneration

(i) Remuneration paid to the directors is as follows:

Salaries and wagesDirectors' feesPost-employment benefits

Company31-Dec-19

Number

---

322

285310

Company31-Dec-18

Number

---

112

271284

Company31-Dec-19

Number

328

282313

Company31-Dec-18

Number

326

258287

Company31-Dec-19

119,597 68,216

5,130

192,943

Company31-Dec-18

117,847 115,388 984,701

1,217,936

(ii) The directors' remuneration shown above includes

Chairman

Highest paid director

(iii) The emoluments of all other directors fell within the following range:

Above N4,800,000 N2,300,000 - N4,800,000 N1,500,000 - N2,300,000 N750,000 - N1,500,000 Below N750,000

(d) Termination benefit relates to payments made to disengaged staff during the relevant period.

35 Other operating expenses

Contract staff costAsset repairs and maintenanceCorporate expenses and gift items TelecommunicationAdvertisementAgency related expenses Property insurance expenseInsurance supervisory fund Professional fees Travelling, tours and other passage exps. Auditor's remuneration Bank charges Offices rates and rent Training cost Power and Fuel charges DonationsSubscription Depreciation of property and equipment Amortisation of intangible assets Directors' fees and allowances Hotel management expensesEntertainmentInvestment expensesOthers

Company31-Dec-19

25,807

53,281

Company31-Dec-18

25,807

53,011

Company31-Dec-19

Number8----

8

Company31-Dec-18

Number8----

8

Company31-Dec-19

167,160487,518 318,492 698,084 905,834

72,743 42,366

702,905 223,212 202,532

79,473 90,260 28,337

123,104 166,612

42,777 23,607

457,721 153,599

68,216 13,623 39,937

219,072 268,370

5,595,554

Company31-Dec-18

216,566427,625

206,692 688,134 875,327

95,581 62,950

954,160 525,489 224,205

45,00088,067

109,946 80,216

199,180 50,891 29,686

397,832161,809115,388

11,972 17,631 63,436

357,0216,004,804




Company31-Dec-19

-------- -

9,127(3,677)

5,450

Company31-Dec-18

---------

(50,652)27,871

(22,781)

36 Net impairment losses

Impairment on trade receivable no longer required (see note 7c) Impairment loss on other receivables (see note 11b) Write - off of AFS Financial assets Impairment on Premium deposit Impairment loss on reinsurance assets Impairment loss AFS Financial asset(note 8.2aiib) Specific impairment loss on finance leases receivable Impairment loss on HTM Bond Investment Collective impairment loss on finance leases receivable Specific Impairment write back on loans (see note 12i) Collective impairment write back on loans (see note 12i)

37 Income tax expense

Current tax on profits for the year: Company income tax Education tax Technology levy Nigeria Police fund levy Withholding tax on dividend income

Total current tax Deferred tax charge credit

(b) The tax on the company's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:

Profit before income tax Tax calculated at domestic rate applicable in Nigeria at 30% (2018: 30%) Effect of: Tax exempt income Non-deductible expenses Technology levy Tax assessment based on minimum tax WHT paid on dividend Capital allowance

Total income tax expense in comprehensive income

Company31-Dec-19

321,321-

112,865564

-

434,750 -

434,750

Company31-Dec-18

535,933-

102,541-

114,683

753,157 1,476,304 2,229,461

Company31-Dec-19

11,286,465

3,385,939

(10,481,108)

8,261,056 112,865

(321,322) (43,936)

(478,745)

434,750

Company31-Dec-18

11,463,674

3,439,102

(7,357,966)

6,940,001 114,637

(450,000) (62,406)

(393,907)

2,229,461




Company31-Dec-19

30.00%

-92.86%73.19%

0.00%1.00%0.00%

-2.85%-0.39%-4.24%

3.85%

Company31-Dec-18

30.00%

-64.19%60.54%

0.00%1.00%0.00%

-3.93%-0.54%-3.44%

19.45%

Reconciliation of effective tax rate

Tax calculated at domestic rate applicable in Nigeria at 30% (2017: 30%) Effect of: Tax exempt income Non-deductible expenses Education tax Technology levy Capital gains tax Tax assessment based on minimum tax WHT paid on dividend Capital allowance

Effective tax rate

Uncertainty over Income tax treatments The Company's general business keeps a reserve for unexpired risk. Section 16(8)(a) of CITA allows general businesses

to take as a deduction, a 'reserve for unexpired risks'. This is the risk associated with future financial periods and includes the 'unearned premium' received by the insurer applicable to those periods. Therefore there is uncertainty around whether the deduction as permitted by the tax law is actually a "tax exemption or a 'deduction’ for that year. The Company has treated the reserve for unexpired risks as a tax exemption as the Company believes that the reserve for unexpired risks would will be allowed as an exemption.

The Company believes that its treatment of the reserve for unexpired risk for its general business is adequate based on its assessment of factors including interpretations of tax law and prior experience with the tax authorities.

38 Earnings Per Share

Profit from continuing operations attributable to owners of the parent Loss from discontinued operations attributable to owners of the parent

Total

Weighted average number of ordinary shares in issue before deducting bonus shares Bonus issued as of 31 May 2018

Weighted average number of shares in issue

Basic and diluted Earnings per share (kobo) From continuing operations From discontinued operations


39 Dividend The dividend declared and paid in 2019 was a cash dividend of N3bn (15 kobo per share). The Board of Directors had

recommended the payment of N4bn (20 kobo per share). However, the shareholders resolved to reduce the dividend recommended for payment from N4bn to N3bn.

A cash dividend of N3.5bn will be proposed at the next annual general meeting in respect of the year ended 31 Dec 2019. This has been disclosed in the financial statement.

Company31-Dec-19

10,851,715

-

10,851,715

10,000,000-

10,000,000

109

- 109

Company31-Dec-18

9,183,321

-

9,183,321

9,212,561 6,292,673

15,505,234

59-

59




Company31-Dec-19

119,597 5,056

124,653

Company31-Dec-18

94,925 4,264

99,189

Company31-Dec-19

64,821

3,049

Company31-Dec-18

84,386

3,791

40 Related parties Leadway Assurance Company Limited is the ultimate parent/controlling party of the company. Related parties to the Company are as follows:

(I) Subsidiary The Company has one subsidiary as at 31 December 2019. Transactions between Leadway Assurance Company

Limited and the subsidiary also meet the definition of related party transactions. During the year, 641,462,095N representing the consideration for a bond was transferred to the subsidiary as deposit for shares. In addition, N83,597,962 was advanced as loan to the subsidiary

(ii) Key management personnel The key management personnel have been identified as the members of the board of directors (executive and non

executive members), including their close members of family and any other entity over which they exercise control. Close members of family are those family members who may be expected to influence, or be influenced by that individual in their dealings with Leadway Assurance Company Limited. The compensation paid or payable to key management personnel for employee services is disclosed in note 34c

Salaries and other short term employee benefits Pension cost - defined contribution

Key management personnel and their immediate relatives engaged in the following transactions with the company during the year.

Loans and advances to key management Interest income earned by the company during the year

41 Contingent liabilities, litigations and claims The company in the ordinary course of business is currently involved in 55 cases (2018: 48) legal cases. The actions

are vigorously contested and the Directors are of the opinion that no significant liability will arise therefrom in excess of the provision that has been made in the financial statements.

In 2018, The National Insurance Commission (NAICOM) fined the Company the sum of N2,674,029,543 ($7,458,730.70) for alleged failure to remit co-insurance premium within 30 days as required by the Market Conduct Guidelines for Insurance Institutions 2015 (the Market Guidelines).

Following the Company's objection to and appeal against the imposition of the fine, NAICOM has rescinded the demand for payment, pending their consideration of the Company's objection and appeal. The Company is optimistic of a favorable outcome of its objection and appeal. Accordingly, no provision has been recognized in respect of the fine as at December 2019.

42 Contravention of laws and regulations The Company in 2019 paid fines totaling N37,500. See table below for descriptions of the fines and amount paid

Nos Description of fines Amount N i Late response to Naicom's enquiry on a client's policy 37,500

43 Events after the reporting date The World Health Organization declared the coronavirus (COVID – 19) outbreak a pandemic and most governments

have taken restrictive measures to contain its further spread by introducing lockdowns, closures of borders and travel restrictions which has affected the free movement of people and goods. The Nigerian Centre for Disease Control (NCDC) has confirmed COVID -19 cases in Nigeria and this has resulted in lock down in certain states. The pandemic has caused a significant reduction in social interactions, disruption in economic activities while some public facilities have been shut down in a bid to reduce the spread of the virus.

The Company considers this outbreak to be a non-adjusting subsequent event. As the situation is fluid and rapidly evolving, the Directors do not consider it practicable to provide a quantitative estimate of the potential impact of this outbreak and will continue to evaluate the impact of COVID-19 on the Company’s operations, financial position and operating results.

As at the date these financial statements were authorized for issue, the Directors were not aware of any material adverse effects on the financial statements as a result of the COVID-19 outbreak. There were no other events after the reporting date that could have had a material effect on the financial statements of the Company that have not been provided for or disclosed in these financial statements.




APPENDICES TO FINANCIAL STATEMENTS(OTHER NATIONAL DISCLOSURES)


Value Added Statement(All amounts in thousands of Nigerian Naira unless otherwise stated)

Gross premium income (Local)Investment income - Local Other income - Local Reinsurance, claims, commission & operating expenses - Local - Foreign Value added Applied to pay:

Employee benefit expenseGovernment as tax

Retained in the businessDepreciation of Property and equipmentAmortisation of intangible assetsTo augment reserve Value added

Company2019

90,596,192

31,853,455

705,604

(96,171,767) (11,889,561)

15,093,923

3,196,138 434,750

457,721 153,599

10,851,715

15,093,923

Company2018

87,519,720

22,805,449

4,262,904

(87,397,949) (11,372,553)

15,817,571

3,845,148 2,229,461

397,832 161,809

9,183,321

15,817,571

%

100

20% 3%

3% 2%

72%

100%

%

100

25%14%

3%1%

58%

100%


Five Year Financial Summary(All amounts in thousands of Nigerian Naira unless otherwise stated)

COMPANY

Assets Cash and cash equivalents Trade receivables Investment securities Reinsurance assets Deferred acquisition cost Other receivables and prepayment Loans and advances Property and equipment Investment properties Investment in subsidiaries Investment in associates Deferred tax assets Intangible assets Statutory deposits

Total assets

Liabilities Trade payables Current tax liabilities Other liabilities Insurance contract liabilities Investment contract liabilities Deferred tax liabilities

Total liabilities

Capital and reserves Issued and paid share capital Share premium Contingency reserve Retained earnings Assets revaluation reserves Fair value reserves Other reserves

Shareholders funds:

Total equity and liabilities

2019

26,210,607 102,459

300,626,105 39,038,453

825,367 2,132,561 1,402,795 4,412,066

17,199,024 2,153,425

- -

162,448 500,000

394,765,310

9,690,123 859,502

4,539,823 296,704,133

26,796,212 1,883,284

340,473,077

10,000,000 588,575

13,648,610 24,297,458

1,558,699 4,198,891

-

54,292,233

394,765,310

2018

32,978,304 395,585

209,289,720 43,688,887

851,069 1,417,602 1,395,564 3,428,095

16,414,443 2,153,425

- -

255,339 500,000

312,768,033

11,573,804 1,083,948 5,627,973

225,437,157 21,890,990

1,883,284

267,497,156

10,000,000 588,575

11,732,730 18,361,620

1,497,292 3,090,660

-

45,270,877

312,768,033

2017

27,800,239 231,987

179,922,719 35,235,353

548,797 3,534,606 1,065,407 3,828,939

14,963,765 3,637,495

- 286,446 392,884 500,000

271,948,637

3,633,509 1,119,536

12,926,747 183,982,546

22,532,309 693,427

224,888,074

4,682,450 4,433,748 9,877,208

20,795,497 1,435,516 5,836,144

-

47,060,563

271,948,637

2016

24,189,697 169,761

111,041,245 11,720,783

486,416 1,115,754

797,368 3,645,335 8,159,419 3,637,495

- 286,446 313,804 500,000

166,063,523

2,754,639 900,143

7,097,389 104,757,646

18,294,287 728,673

134,532,777

4,682,450 4,233,748 7,839,003

11,537,043 1,363,442 1,875,060

-

31,530,746

166,063,523

2015

14,656,941 543,971

91,511,039 11,405,947

423,123 1,114,898 1,217,079 3,760,439 8,795,000 3,294,467

- 114,129

31,308 50,000

137,368,341

2,714,107 651,998

3,895,636 93,785,535 15,459,507

556,356

117,063,139

4,389,798 387,826

6,481,209 7,232,879 1,294,941

518,549 -

20,305,202

137,368,341


Five Year Financial Summary Continued(All amounts in thousands of Nigerian Naira unless otherwise stated)

STATEMENT OF COMPREHENSIVE INCOME

COMPANY

Gross premium written

Premium earned

Profit before taxationTaxationProfit after taxation

Transfer to contingency reserve

Basic/diluted earnings per share (kobo)

From continuing operations (kobo)From discontinued operations (kobo)

2019

90,596,192

70,898,107

11,286,465 (521,717)

10,764,748

(1,915,879)

108 -

2018

87,519,720

71,121,875

11,412,782 (2,229,461)

9,183,321

(1,855,522)

59 -

2017

84,189,079

69,823,794

13,448,965 (652,304)

12,796,661

(2,038,206)

83 -

2016

46,648,918

39,947,165

6,484,941 (105,012) 6,379,929

(943,301)

72 -

2015

39,008,139

29,901,721

3,394,793 (585,215) 2,809,578

(758,747)

73 -


AssetsCash and cash equivalentsInvestment securitiesTrade receivablesReinsurance assetsDeferred acquisition costLoans and other receivablesInvestment in subsidiariesInvestment propertiesDeferred tax assetsIntangible assetsProperty and equipmentStatutory deposits

Total assets

LiabilitiesInsurance contract liabilitiesTrade payables and other liabilitiesCurrent tax liabilitiesDeferred tax liabilities

Total liabilities

Capital and reservesShare capitalShare premiumContingency reserveRetained earningsAsset revaluation reserveFair value reserves

Shareholders funds:


31-Dec-19

21,308,948 40,925,920

97,595 38,674,736

825,367 721,484

- 4,065,450

- 104,356

2,493,152 300,000

109,517,008

66,644,120 11,016,115

374,279 773,269

78,807,783

5,000,000 -

9,811,735 10,966,196

1,392,060 3,539,234

30,709,225

109,517,008

31-Dec-18

26,860,343 30,277,807

381,436 42,636,372

851,068 1,255,786

- 4,056,462

- 145,334

2,505,062 300,000

109,269,670

70,175,551 11,684,791

614,581 773,264

83,248,187

5,000,000 -

8,451,352 8,318,251 1,342,684 2,909,197

26,021,484

109,269,670

General Insurance BusinessStatement of Financial Position(All amounts in thousands of Nigerian Naira unless otherwise stated)As at 31 December 2019


General Insurance BusinessIncome Statement

(All amounts in thousands of Nigerian Naira unless otherwise stated)For the year ended 31 December 2019

Gross premium writtenAdd: reduction in unearned premiumGross insurance premium revenue

Reinsurance expense

Net insurance premium earned

Commission income

Total revenue

Claims expensesUnderwriting expensesNet underwriting expenses

Total underwriting profit

Investment incomeNet fair value gain/(loss) on assets at fair value Other operating income Gain on non-current assets distributed to owners Employee benefit expenses and other operating expenses

Finance costNet impairment gains/(losses)

Profit before tax

Income taxesProfit for the year

Other comprehensive income:Fair value changes on available for sale financial assetsNet amount transferred to income statementRevaluation gain on land & buildingOther comprehensive income for the year, net of tax

Total comprehensive income

31-Dec-19

35,046,533 (1,086,495) 33,960,038

(17,393,664)

16,566,374

2,769,245

19,335,619

(6,348,569) (5,144,809)

(11,493,378)

7,842,242

3,466,916 282,351 408,583

- (5,202,812) (1,044,962)

- 4,633

6,801,913

(243,591) 6,558,322

630,037 -

49,376 679,413

7,237,735

31-Dec-18

30,238,298 486,041

30,724,339

(15,490,928)

15,233,411

1,727,104

16,960,515

(8,394,733) (3,305,257)

(11,699,990)

5,260,525

3,098,868 (147,295) 3,743,767

261,083 (5,804,280)

1,152,143

- 872

6,413,540

(783,473) 5,630,067

(1,334,214) -

81,962 (1,252,252)

4,377,815


General Insurance Business Revenue Account(All amounts in thousands of Nigerian Naira unless otherwise stated)For the year ended 31 December 2019

INCOME Gross premium written

Less: Increase/ (decrease) in unearned premium Gross premiums earned

Reinsurance cost Net premium earned

Commissions earned

Total underwriting income

EXPENSES Gross claims paid

Increase/(decrease) in outstanding claims provision Gross claims incurred

Deduct: reinsurance claims recoveries/recoverable Net claims incurred

Add: Underwriting expenses: Commission expenses Acquisition expenses Maintenance expenses

Total expenses and claims incurred

Underwriting profit/(loss)

MOTOR

3,805,485

(201,391) 3,604,094

(155,277)

3,448,817

68,068

3,516,885

(2,125,008)

(389,171) (2,514,179)

186,425 (2,327,755)

(472,507) (254,579)

(727,086)

(3,054,841)

462,044

FIRE

3,337,732

(169,810) 3,167,922

(1,825,021)

1,342,901

771,957

2,114,858

(2,161,387)

300,017 (1,861,370)

308,447 (1,552,923)

(619,820) (223,287)

(843,107)

(2,396,030)

(281,172)

GEN. ACC.

1,725,193

(140,834) 1,584,359

(352,460)

1,231,899

162,498

1,394,397

(310,666)

(161,283) (471,949)

(3,456) (475,405)

(306,703) (115,412)

(422,115)

(897,520)

496,877

AGRIC.

575,262

210,533 785,796

(392,672)

393,124

66,969

460,093

(270,030)

(21,223) (291,253)

144,304 (146,949)

(69,986) (38,484)

(108,470)

(255,419)

204,674

MARINE

1,703,654

32,807 1,736,460

(774,742)

961,718

246,975

1,208,693

(766,765)

(493,169) (1,259,934)

195,516 (1,064,418)

(275,202) (113,971)

(389,173)

(1,453,591)

(244,898)

BOND

893,522

(23,978) 869,544

(444,498)

425,047

82,536

507,582

(641,504)

265,527 (375,977)

(91,347) (467,324)

(8,943) (59,775)

(68,718)

(536,042)

(28,459)

ENGINEERING

1,035,189

145,410 1,180,599

(286,228)

894,372

97,039

991,411

(162,234)

(31,013)

(193,247)

104,508

(88,739)

(201,226)

(69,252)

(270,478)

(359,217)

632,193

SPECIAL RISK

21,970,495

(939,232) 21,031,263

(13,162,766)

7,868,497

1,273,204

9,141,702

(3,115,261)

5,148,242 2,032,981

(2,258,037)

(225,057)

(899,071)

(1,416,593)

(2,315,664)

(2,540,721)

6,600,982

2019 TOTAL

35,046,533

(1,086,495) 33,960,038

(17,393,664)

16,566,374

2,769,245

19,335,619

(9,552,855)

4,617,927

(4,934,928)

(1,413,640) (6,348,568)

(2,853,458) (2,291,351)

(5,144,809)

(11,493,377)

7,842,241

2018 TOTAL

30,238,298

486,041 30,724,339

(15,490,929)

15,233,410

1,727,104

16,960,514

(21,819,387)

(10,838,510) (32,657,897)

24,263,165 (8,394,732)

(2,767,960)

(537,297)

(3,305,257)

(11,699,989)

5,260,525

162 ANNUAL REPORT& ACCOUNTS 2019

Gross PremiumNet PremiumTotal Underwriting IncomeInvestment IncomeClaims expensesAnnuity ClaimUnderwriting expensesUnderwriting ProfitOperating expensesProfit before tax

Earnings per share

Performance ratios

Underwriting expenses ratioClaims ratioOperating expenses ratioCombined ratioUnderwriting profit ratio

31-Dec-19

35,046,533 16,566,374 19,335,619 3,466,916

(6,348,569) -

(5,144,809) 7,842,242

(5,202,812) 6,801,913

53kobo

31-Dec-18

30,238,298 15,233,411 16,960,515 3,098,868

(8,394,733) -

(3,305,257) 5,260,525

(5,804,280) 6,413,540

53kobo

% Change

16%9%

14%12%-24%

0%56%49%-10%

6%

General Insurance Business

31-Dec-1811%28%19%58%17%

31-Dec-1931%38%31%

101%47%

31-Dec-18 22%55%38%

115%35%

31-Dec-1915%18%15%48%22%

Using Gross Written Premium Using Net Written Premium

Financial Performance


AssetsCash and cash equivalentsInvestment securitiesTrade receivablesReinsurance assetsLoans and other receivablesInvestment in subsidiariesInvestment propertiesDeferred tax assetsIntangible assetsProperty and equipmentStatutory deposits

Total assets

LiabilitiesInsurance contract liabilitiesInvestment contract liabilitiesTrade payables and other liabilitiesCurrent tax liabilitiesDeferred tax liabilities

Total liabilities

Capital and reservesShare capitalShare premiumContingency reserveRetained earningsAsset revaluation reserveFair value reserves

Shareholders funds


31-Dec-19

4,901,658 259,700,185

4,864 363,717

3,546,396 2,153,425

13,133,574 -

58,093 1,918,913

200,000

285,980,825

230,060,011 26,796,212

3,946,356 485,224

1,110,014

262,397,817

5,000,000 588,575

3,836,875 13,331,262

166,640 659,657

23,583,009

285,980,825

31-Dec-18

6,117,962 179,011,913

14,149 1,052,515 1,886,817 2,153,425

12,357,981 -

110,005 923,034 200,000

203,827,801

155,261,604 21,890,989

5,846,440 469,368

1,110,014

184,578,415

5,000,000 588,575

3,281,379 10,043,363

154,606 181,462

19,249,385

203,827,801

Life BusinessStatement of Financial Position(All amounts in thousands of Nigerian Naira unless otherwise stated)As at 31 December 2019


Life businessIncome Statement

(All amounts in thousands of Nigerian Naira unless otherwise stated)For the year ended 31 December 2019

Gross premium writtenAdd: reduction in unearned premium Company life Gross insurance premium revenue

Reinsurance expense

Net insurance premium earned

Commission income

Total revenue

Gross benefits and claims paidIncrease in annuity fundIncrease in individual life fundClaims ceded to reinsuranceGross change in contract liabilitiesUnderwriting expenses

Net Underwriting expenses

Total Underwriting (loss)/profit

Investment incomeProfit/(Loss) on investment contractsNet fair value gain/(loss) on assets at fair value Other operating income Gain on non-current assets distributed to owners Employee benefit expenses and other operating expensesResult of operating activities

Finance costNet impairment gains/(losses)

Profit before tax

Income taxesProfit for the year

Other comprehensive income:Fair value changes on available for sale financial assetsForeign exchange difference on unquoted financial assetsRevaluation gain on land & buildingOther comprehensive income for the year, net of tax

Total comprehensive income

31-Dec-19

55,549,659 (655,391)

54,894,268

(562,535)

54,331,733

118,934

54,450,667

(31,766,243) (73,125,802)

(993,480) (335,954)

(23,734) (2,983,897)

(109,229,111)

(54,778,444)

28,386,540 602,697

33,575,701 297,021

- (3,588,879) 59,273,080

- (10,083)

4,484,552

(191,159) 4,293,393

478,195 -

12,033 490,228

4,783,621

31-Dec-18

57,281,421 (268,532)

57,012,889

(1,124,426)

55,888,463

152,567

56,041,030

(25,273,553) (30,020,421)

(120,183) 469,598

(693,006) (2,854,238)

(58,491,803)

(2,450,773)

19,706,579 239,712

(11,663,959) 549,137

2,670,722 (4,032,930)

7,469,261

- 10,739

5,029,227

(1,445,987) 3,583,240

(1,411,271) -

(20,186) (1,431,457)

2,151,783


Life Business Revenue Accounts(All amounts in thousands of Nigerian Naira unless otherwise stated)For the year ended 31 December 2019

57,281,421 -

57,281,421

(1,124,426)

56,156,995

152,567 18,684,085

(11,830,244) 23,809

163,183

63,350,395

(4,248,110) -

(21,025,441) -

(25,273,551)

469,598 (693,006)

(25,496,958)

(30,409,136)

(1,287,105) (2,429,383)

(422,041) (2,658,651)

(62,703,274)

647,121

IncomeGross premium writtenDecrease in unearned incomeGross premium income

Reinsurance expenses

Premium retained

Commissions earnedInvestment incomeFair value gain/ (loss) on annuity bondFair Value Gain on Investment propertyOther income

Total income

Direct claims paidSurrendersAnnuity payments

Increase/(decrease) in outstanding claims

Gross claims incurred

Deduct:

Reinsurance claims recoveries/recoverablesProvision for Outstanding Claims

Net claims incurred

Provision for unexpired risk

Employee benefit expensesCommission expensesMaintenance expensesOperating expenses

Total expenses

Underwriting result

1,713,408 -

1,713,408

(9,190)

1,704,218

280,937 121,506

3,810 55,766

2,166,237

(847,169) - -

-

(847,169)

78,431 (768,738)

(993,480)

(255,550) (359,077)

(12,891) (1,036,803)

(3,426,538)

(1,260,302)

5,431,401

5,431,401

(553,346)

4,878,055

118,934 890,556 385,167

12,076 176,774

6,461,560

(1,852,844) - -

-

(1,852,844)

(335,954) -

(87,244) (2,276,041)

(655,391)

(556,196) (449,886)

(13,845) (1,129,587)

(5,080,947)

1,380,613

48,404,850-

48,404,850

-

48,404,850

25,618,291 32,647,414

- (116,466)

106,554,089

(1,630,480)

(27,435,750)

-

(29,066,230)

(14,922) (29,081,152)

(73,125,802)

(120,259) (1,649,633)

(498,565) (487,395)

(104,962,805)

1,591,283

55,549,659 -

55,549,659

(562,535)

54,987,124

118,934 26,789,785 33,154,088

15,886 116,073

115,181,889

(4,330,493) -

(27,435,750) -

(31,766,243)

(335,954)-

(23,734) (32,125,931)

(74,774,673)

(932,005) (2,458,596)

(525,301) (2,653,785)

(113,470,291)

1,711,598

Individual Life

Group Life Annuity 2019 Total 2018 Total


Revenue Account on Deposit Administration(All amounts in thousands of Nigerian Naira unless otherwise stated)

For the year ended 31 December 2019

Company31 December

2019

3,136,011

(86,188)

-

945,711

-

3,995,533

(474,705)

(74,158)

(1,796,214)

(1,047,759)

(3,392,837)

602,697

Company31 December

2018

3,640,56

(55,202)

8,696

(41,506)

- 3,552,556

(357,234)

(58,246)

(2,212,161)

(685,203)

(3,312,844)

239,712

Income

Investment Income

Loss from sale of investment

Valuation gain on property

Unrealised gains/(losses) from investment

Other income

Expenses

Acquisition expenses

Maintenance cost

Interest on Deposit Administration

Management Expenses

PROFIT/(LOSS) FROM DEPOSIT ADMINISTRATION


Gross PremiumNet PremiumTotal Underwriting IncomeInvestment IncomeClaims expensesAnnuity ClaimUnderwriting expensesUnderwriting ProfitOperating expensesProfit before tax

Earnings per share

Performance ratios

Underwriting expenses ratioClaims ratioOperating expenses ratioCombined ratioUnderwriting profit ratio

31-Dec-19

55,549,659 54,331,733 54,450,667 28,386,540 (4,330,493)

(27,435,750) (2,983,897)

(54,778,444) (3,588,879) 4,484,552

1.30kobo

31-Dec-18

57,281,421 55,888,463 56,041,030 19,706,579 (4,248,110)

(21,025,441) (2,854,238) (2,450,773) (4,032,930) 5,029,227

1.30kobo

% Change

-3%-3%-3%44%2%

30%5%

2135%-11%-11%

Life Business

31-Dec-185%7%7%

19%5%

31-Dec-195%8%7%

20%5%

31-Dec-18 5%8%7%

19%5%

31-Dec-195%8%6%

20%5%

Using Gross Written Premium Using Net Written Premium

Financial Performance


Leadway Assurance Company

Annuities’ Portfolio at 31st December 2019Annuity Business by nature, type and their operation.

TitlePRA Regulated Annuities

Annuities Certain

Number of Policies48,251

115

ClassificationRisk

Risk

Operations ProcedureQuotation; Provisional Agreement; NAICOM Approval; Premium Remittance By PFC; Despatch Policy Document; Administration

Quotation; Premium Remittance; Despatch Policy Document; Administration

Annuity Liabilities, Investment Income and Pay Out.

PRA Regulated AnnuitiesAnnuities Certain

219,963,660671,079

25,501,82594,523

29,066,230-

Title Liability As At 31stDecember 2019(N’000)

Investment Income(N’000)

Pay Out(N’000)

Note: The information above corresponds with the report of the Actuarial Valuation as at 31st December 2019The assets backing Annuity Funds are as follows:

S/N

1234567

ASSETS TYPE

Money Market Quoted Shares Corporate Bonds FGN/State Bonds Real Estate Treasury bills Unquoted Securities TOTAL

ANNUITY(N’000)2,570,733 8,503,308 3,856,275 204,292,389 - 740,953 -

219,963,659

%93 98 100 100 -100 -

70

ANNUITY CERTAIN (N’000)201,282 135,462

334,335 - - -

671,079

%7 2 - 0 - - -

1

Life BusinessAnnuity Statement

(All amounts in thousands of Nigerian Naira unless otherwise stated)As at 31 December 2019


Leadway At A Glance

1970

1971

st31 December

All classes of Insurance, Managed Funds & Trusteeship

Sir Hassan O. Odukale (1926-1999)

General Martin Lurther Agwai (rtd.) - Chairman

Mr. Jeremy Rowse - Director

Mr. Seyi Bickersteth – Director

Mr. Odein Ajumogobia – Director

Mr. Tunde Hassan-Odukale - Managing Director/CEO

Ms. Adetola Adegbayi - Executive Director, General Business

Mr. Oye Hassan-Odukale, mfr - Managing Director/CEO - Retired 31 December, 2019Mr. Tunde Hassan-Odukale - Managing Director/CEO - Appointed 1 January, 2020Ms. Adetola Adegbayi – Executive Director, General InsuranceMr. Tinashe Muyambo – Head, Life BusinessMr. Gboyega Lesi – Commercial DirectorMr. Allan Olufade Suradj – Regional DirectorMrs. Kunbi Adeoti – Human Resources DirectorMr. Odalo Aimufia – Chief Information OfficerMr. Ernest Aziagba – General Insurance ActuaryMr. Tunde Alao-Olaifa – Strategy & Special Projects DirectorMr. Oluwafemi Adebayo – Life Sales DirectorMr. Bamidele Lawal – Chief Technical OfficerMrs. Kikelomo Fischer – Enterprise Risk Management DirectorMr. Olumide Hanson – Company Secretary

YEAR OF INCORPORATION

COMMENCEMENT OF OPERATIONS

FINANCIAL YEAR END

SHAREHOLDERS' FUNDS

TOTAL ASSET BASE

CLASSIFICATION

NUMBER OF BRANCHES

Leadway Vie

Leadway Pensure PFA LimitedLeadway Capital & Trusts LimitedLeadway Hotels LimitedLeadway Properties & Investments Ltd.Leadway Asset Management

SUBSIDIARY

NUMBER OF EMPLOYEES 313 (as at December 31, 2019)

FOUNDER

DIRECTORS

MANAGEMENT STAFF

24

N 54 Billion (as at 31 December 2019)

N 394 Billion (as at 31 December 2019)

ASSOCIATED COMPANIES


ABEOKUTASeriki Fadare Plaza, beside Nigeria Immigration office, Oke-Mosan, Abeokuta08129997096, 08129997097 ABUJALeadway House Plot 1061, Herbert Macaulay Way Central Business District, Cadastral Zone. Abuja08129997114, 08129997115 AKURENACRDB Building, Ado-Owo Road Alagabaka Akure08129997104, 08129997159 BENIN49 Akpakpava Road, Benin City08129997103, 08129997158

CALABAR141, Ndidem Usang Iso Road/ Marian Road, Calabar, Cross River 08129997098, 08129997099

EnuguAkalaka House (2nd floor) 127/129 Chime Avenue New Haven, Enugu08129997106, 08129997161 FESTAC*Twin Place, Plot 2015 Block, 18A, Amuwo- Odofin Govt. Scheme by Apple Bus/stop Festac Link Road, Festac, Lagos08129997005 IBADAN25, Morgaji Are Rd,Iyaganku GRA Off Moshood Abiola Way,Ibadan08129997102, 081299971629

IKEJA*77 Opebi Road, Ikeja, Lagos08129997012

ILORIN 163, Ajase-Ipo.Road, Gaa-Akanbi Junction Road.Anu Oluwapa Complex Ilorin, Kwara State08129997153, 08129997157 JOS 2A Ibrahim Taiwo Rd,GRA Jos08129997122, 08129997123

KANOFustan House 25 Zaria Road Gyadi-Gyadi Round About, Kano08129997112, 08129997168 LEKKIGarnet Building, Igbo-Efon by 2nd round-about along Lekki-Epe Expreway, Lekki, Lagos08129997009 MAKURDI Last Floor, 8 Railway bye pass, High Level, near Zenith bank, Makurdi08129997113 OSOGBO 2nd floor, Moye House Km2,Gbogan /Ibadan Road Oshogbo,Osun State08129997108, 08129997163 PORT HARCOURT8 Igbodo Street, Old GRA, Port Harcourt08129997109, 08129997110

UYO140, Atiku Abubakar Way Uyo08129997100, 08129997155

SAGAMU 13 Isale Oko Road, Sagamu08129997101, 08129997156 SOKOTO15A, Kano Road Not Far From Central Of Nigeria, Sokoto.08129997124

WARRIEcobank Building 60 Effurun/Sapele Road Warri08129997111, 08129997166 ZARIALast floor, UBA building by PZ Kaduna Road Zaria08129997125

MARINA24 Campbell Street, Lagos Island08129997011

Branch Network

Branch Offices

Registered office: NN 28/ 29 Constitution Road, Kaduna.

Corporate office: 121/123 Funso Williams Avenue, Iponri Lagos.

* Asterisked offices are domiciled in Lagos


Leadway Vie

Leadway Assurance Company Limited gained inroads into Cote d’Ivoire through the acquisition of a Life Insurance Company. Our decision to expand into Cote d’Ivoire was a result of the identified opportunity in the Ivorian Market. Increasing institutional Investment in the country has resulted to increasing economic activities. We started operating as Leadway Vie on the 30th of September, 2018 upon receiving regulatory approval for the acquisition and name change.

In a market that has created so much reputational damage to insurance through value eroding products, there exists both the opportunity to gain market share from acting fairly and a discouragement of customers to buy insurance. Our goal is to encourage customers to embrace the change. We aim to become Ivory Coast’s foremost insurance company, following in the steps of its parent brand in ensuring integrity, service, customer focus, openness, respect for the individual and excellence (iSCORE). Leadway Vie is the transparent insurer; we listen more than we speak and we are open to our Customers.

The Company intends to transform the insurance space by becoming the leading digital Insurance Company in Cote d’Ivoire.

Leadway Pensure PFA

Leadway Pensure PFA Limited was incorporated on the 25th day of August 2004 in accordance with the provisions of the Pension Reforms Act 2004 to carry on the services of a Pension Fund Administrator [PFA], and was duly licensed by the National Pensions Commission (PenCom) in 2005. We have an authorised and Paid-up share capital of N2.0 Billion. As at December 31st 2017, their shareholders fund stood at 5.018 billion, unimpaired by losses. The principal goal of the company is to provide effective support to contributors in securing a comfortable retirement, by offering world class pension fund management and administration services.

Overall, Leadway Pensure PFA is considered in the individual and corporate market as being Strong, Progressive and driven by Integrity, having successfully managed funds and provided enviable returns. With a responsive complaints resolution and feedback system, the business interacts and stays close to its customers in order to nurture and retain them, always available to take their numerous customers through the process of attaining desirable financial status at retirement.

Leadway Capital & Trusts

Leadway Capital & Trusts Limited is a subsidiary of the Leadway Holding Company. The reputation enjoyed by the Leadway brand has been attained and sustained by the pursuit of improvements to maintain competitive advantage. All aspects of the business are approached with discipline – the recruitment of staff, development of products, use of advanced technology to final service delivery.

Since incorporation, the company has been providing trusteeship services in diverse arrangements. Specifically, Leadway Capital & Trusts Limited provides professional services in the following areas:

Short Term Financing for pre-qualified transactions, Equipment Leasing to select Corporate Bodies, as well as Investing in varied transactions where management finds it expedient. Leadway Capital and Trusts Limited is able to tap into the resources and over 45-year experience of the Leadway brand.

Address:121/123 Funso Williams Avenue, Iponri, Surulere, Lagos; P.O. Box 6437, Marina, Lagos. Tel: 01-2700700 Fax: 01-2700800, E-mail: [email protected], Website: www.leadwaycapital.com

Leadway Hotels

Leadway Hotels Limited, incorporated March 2005, is a subsidiary of Leadway Holding Company and an up-and-coming player in the hospitality industry in Nigeria. It aims to become a distinctly recognized brand in the hospitality and service industry. Leadway Hotels Limited is dedicated to quality and services and has a reputation for service efficiency and customers’ reliability. For almost a decade, the Leadway Hotels Limited, has honoured its hospitality commitments and has earned its reputation of excellence in this regard. All aspects of the business are approached with discipline; the recruitment of staff, the advancement of technologies and the corporate/personal service offered to its growing clientele.

Under its umbrella are three notable and thriving businesses in Lagos and Abuja, namely, Leadway Hotel in Ikeja, Le´ola Suites and Panache Restaurant, both in Abuja. One of the strengths of the company is its ability to effectively coordinate these businesses with innovative prowess which is helping it carve a niche within the hospitality industry in Nigeria. These are evident in the excellent local and international cuisine offered to its diverse guests. Its Restaurants boasts of a menu selection that is varied enough to cater for all tastes.

Operating Address: Leadway Hotel, Ikeja. 1 Mugambo Close, Maryland Estate, Lagos. Nigeria. Tel:+2341 2790800/0802/0803/0806, Fax:+2341 2790801, E-mail: [email protected] Leola Suites/Panache Restaurant Leadway House (near NNPC Towers) 1061 Herbert Macaulay Way Central Business District Abuja, Nigeria.

Leadway Properties & Investment Limited

Leadway Properties & Investment Limited, a wholly-owned subsidiary of Leadway Holding Company, is a property development company involved in the acquisition, development, management and sales of high quality, serviced commercial and residential properties in the Nigerian real estate market.

Ÿ Trusts of Consortium LendingŸ Debenture TrustsŸ Unit Trusts and Mutual FundsŸ Mortgage TrustsŸ Investment TrustsŸ Leasing TrustsŸ Employee Share Ownership Trusts

Leadway Asset Management

Leadway Asset Management is a wholly owned subsidiary of the Leadway Holdings and an associated company with Leadway Assurance Company Limited. We are a full service asset management company providing wealth management services to high net worth and ultra-high net worth individuals, portfolio and advisory services to institutions and investment solutions to retail clients.

As a company, Leadway Asset Management leverages the strength and experience of t rands to offer tailor-made investment solutions to her clients, helping them he company and Swiss RE bmeet their long term investment objectives

Ÿ Custodian TrusteeshipŸ Nominee Shareholding Management of other Trusts as Endowments, Foundations and Co-operativesŸ Preparation of WillsŸ Living TrustsŸ Education TrustsŸ Public Trusts

Subsidiary

Associated Companies


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Documents

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